Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Feb. 18, 2014 | Jun. 30, 2013 | |
Document Information [Line Items] | ' | ' | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Trading Symbol | 'LO | ' | ' |
Entity Registrant Name | 'LORILLARD, INC. | ' | ' |
Entity Central Index Key | '0001424847 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 362,205,301 | ' |
Entity Public Float | ' | ' | $16,400,000,000 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Millions, unless otherwise specified | ||||
ASSETS: | ' | ' | ||
Cash and cash equivalents | $1,454 | $1,720 | ||
Short-term investments | 157 | ' | ||
Accounts receivable, less allowances of $3 and $3 | 19 | 18 | ||
Other receivables | 29 | [1] | 52 | [1] |
Inventories | 499 | 410 | ||
Deferred income taxes | 555 | 557 | ||
Other current assets | 23 | 20 | ||
Total current assets | 2,736 | 2,777 | ||
Plant and equipment, net | 316 | 298 | ||
Long-term investments | 93 | ' | ||
Goodwill | 102 | 64 | ||
Intangible assets, net | 87 | 57 | ||
Deferred income taxes | 51 | 48 | ||
Other assets | 151 | 152 | ||
Total assets | 3,536 | 3,396 | ||
LIABILITIES AND SHAREHOLDERS' DEFICIT: | ' | ' | ||
Accounts and drafts payable | 42 | 39 | ||
Accrued liabilities | 377 | [1] | 356 | [1] |
Settlement costs | 1,224 | 1,183 | ||
Income taxes | 8 | 23 | ||
Total current liabilities | 1,651 | 1,601 | ||
Long-term debt | 3,560 | 3,111 | ||
Postretirement pension, medical and life insurance benefits | 305 | 409 | ||
Other liabilities | 84 | 52 | ||
Total liabilities | 5,600 | 5,173 | ||
Commitments and Contingent Liabilities | ' | ' | ||
Shareholders' Deficit: | ' | ' | ||
Preferred stock, $0.01 par value, authorized 10 million shares | ' | ' | ||
Common stock: | ' | ' | ||
Authorized-600 million shares; par value-$.01 per share Issued-382 million and 525 million shares (outstanding 365 million and 382 million shares) | 4 | 5 | ||
Additional paid-in capital | 256 | 298 | ||
Retained earnings (deficit) | -1,438 | 2,351 | ||
Accumulated other comprehensive loss | -130 | -241 | ||
Treasury stock at cost, 17 million and 143 million shares | -756 | -4,190 | ||
Total shareholders' deficit | -2,064 | -1,777 | ||
Total liabilities and shareholders' deficit | $3,536 | $3,396 | ||
[1] | Includes intercompany royalties between Issuer and non-guarantor subsidiaries of a corresponding amount. |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, except Per Share data, unless otherwise specified | ||
Accounts receivable, allowances | $3 | $3 |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 10 | 10 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 600 | 600 |
Common stock, shares issued | 382 | 525 |
Common stock, shares outstanding | 365 | 382 |
Treasury stock, shares | 17 | 143 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Net sales (including excise taxes of $1,978, $1,987, and $2,014) | $1,743 | $1,827 | $1,804 | $1,577 | $1,704 | $1,661 | $1,731 | $1,526 | $6,950 | $6,623 | $6,466 | |||
Cost of sales (including excise taxes of $1,978, $1,987, and $2,014) | ' | ' | ' | ' | ' | ' | ' | ' | 4,231 | 4,241 | 4,123 | |||
Gross profit | 659 | 669 | 678 | 713 | 644 | 602 | 612 | 523 | 2,719 | 2,382 | 2,343 | |||
Selling, general and administrative | ' | ' | ' | ' | ' | ' | ' | ' | 665 | [1] | 504 | [1] | 451 | [1] |
Operating income | ' | ' | ' | ' | ' | ' | ' | ' | 2,054 | 1,878 | 1,892 | |||
Investment income | ' | ' | ' | ' | ' | ' | ' | ' | 2 | 4 | 3 | |||
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | -172 | -154 | -125 | |||
Income before income taxes | ' | ' | ' | ' | ' | ' | ' | ' | 1,884 | 1,728 | 1,770 | |||
Income taxes | ' | ' | ' | ' | ' | ' | ' | ' | 704 | 629 | 654 | |||
Net income | $281 | $258 | $313 | $328 | $309 | $283 | $284 | $223 | $1,180 | $1,099 | $1,116 | |||
Earnings per share: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Basic | ' | ' | ' | ' | ' | ' | ' | ' | $3.15 | $2.82 | $2.67 | |||
Diluted | $0.76 | $0.69 | $0.83 | $0.86 | $0.80 | $0.72 | $0.72 | $0.57 | $3.15 | $2.81 | $2.66 | |||
Weighted average number of shares outstanding: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Basic | 366.53 | 371.01 | 375.86 | 378.62 | 384.87 | 390.21 | 390.53 | 391.45 | 372.96 | 389.27 | 417.32 | |||
Diluted | 367.19 | 371.77 | 376.61 | 379.42 | 385.59 | 391.05 | 391.44 | 392.4 | 373.71 | 390.13 | 418.06 | |||
[1] | Includes intercompany royalties between Issuer and non-guarantor subsidiaries of a corresponding amount. |
CONSOLIDATED_STATEMENTS_OF_INC1
CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Excise taxes | $1,978 | $1,987 | $2,014 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net income | $281 | $258 | $313 | $328 | $309 | $283 | $284 | $223 | $1,180 | $1,099 | $1,116 |
Other comprehensive income (loss), net of tax: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Defined benefit retirement plans gain (loss), net of tax expense (benefit) of $41, $(4), and $(64) | ' | ' | ' | ' | ' | ' | ' | ' | 110 | -13 | -119 |
Foreign currency translation adjustments, net of tax expense (benefit) of $-, $- and $- | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' |
Other comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 111 | -13 | -119 |
Comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | $1,291 | $1,086 | $997 |
CONSOLIDATED_STATEMENTS_OF_COM1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Defined benefit retirement plans gain (loss), tax expense (benefit) | $41 | ($4) | ($64) |
Foreign currency translation adjustments, tax expense (benefit) | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_SHA
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) (USD $) | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock |
In Millions | ||||||
Beginning Balance at Dec. 31, 2010 | ($225) | $5 | $239 | $1,666 | ($109) | ($2,026) |
Net income | 1,116 | ' | ' | 1,116 | ' | ' |
Other comprehensive (loss) income, net of tax expense (benefit) of $41 in 2013, ($4) in 2012 and ($64) in 2011 | -119 | ' | ' | ' | -119 | ' |
Dividends paid ($2.20 per share) in 2013, ($2.07 per share) in 2012 and ($1.73 per share) in 2011 | -723 | ' | ' | -723 | ' | ' |
Share repurchases | -1,586 | ' | ' | ' | ' | -1,586 |
Share-based compensation | 24 | ' | 24 | ' | ' | ' |
Ending Balance at Dec. 31, 2011 | -1,513 | 5 | 263 | 2,059 | -228 | -3,612 |
Net income | 1,099 | ' | ' | 1,099 | ' | ' |
Other comprehensive (loss) income, net of tax expense (benefit) of $41 in 2013, ($4) in 2012 and ($64) in 2011 | -13 | ' | ' | ' | -13 | ' |
Dividends paid ($2.20 per share) in 2013, ($2.07 per share) in 2012 and ($1.73 per share) in 2011 | -807 | ' | ' | -807 | ' | ' |
Share repurchases | -578 | ' | ' | ' | ' | -578 |
Share-based compensation | 35 | ' | 35 | ' | ' | ' |
Ending Balance at Dec. 31, 2012 | -1,777 | 5 | 298 | 2,351 | -241 | -4,190 |
Net income | 1,180 | ' | ' | 1,180 | ' | ' |
Other comprehensive (loss) income, net of tax expense (benefit) of $41 in 2013, ($4) in 2012 and ($64) in 2011 | 111 | ' | ' | ' | 111 | ' |
Dividends paid ($2.20 per share) in 2013, ($2.07 per share) in 2012 and ($1.73 per share) in 2011 | -823 | ' | ' | -823 | ' | ' |
Retirement of treasury shares | ' | -1 | -82 | -4,146 | ' | 4,229 |
Share repurchases | -795 | ' | ' | ' | ' | -795 |
Share-based compensation | 27 | ' | 27 | ' | ' | ' |
Excess tax benefit on share-based compensation | 13 | ' | 13 | ' | ' | ' |
Ending Balance at Dec. 31, 2013 | ($2,064) | $4 | $256 | ($1,438) | ($130) | ($756) |
CONSOLIDATED_STATEMENTS_OF_SHA1
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) (Parenthetical) (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Other comprehensive (loss) income, tax expense (benefit) | $41 | ($4) | ($64) |
Dividends paid per share | $2.20 | $2.07 | $1.73 |
Accumulated Other Comprehensive Loss | ' | ' | ' |
Other comprehensive (loss) income, tax expense (benefit) | $41 | ($4) | ($64) |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Cash flows from operating activities: | ' | ' | ' | |
Net income | $1,180 | $1,099 | $1,116 | |
Adjustments to reconcile to net cash provided by operating activities: | ' | ' | ' | |
Depreciation and amortization | 50 | 39 | 37 | |
Pension, health and life insurance contributions | -44 | -43 | -42 | |
Pension, health and life insurance benefits expense | 36 | 44 | 28 | |
Deferred income taxes | -42 | -11 | -15 | |
Share-based compensation | 18 | 20 | 16 | |
Excess tax benefits from share-based arrangements | -13 | -11 | -4 | |
Changes in operating assets and liabilities, net of amounts acquired: | ' | ' | ' | |
Accounts and other receivables | -7 | -8 | 1 | |
Inventories | -89 | -118 | ' | |
Accounts payable and accrued liabilities | 20 | 64 | -33 | |
Settlement costs | 41 | 32 | 91 | |
Income taxes | 36 | 59 | -6 | |
Other current assets | 3 | 5 | -10 | |
Other assets | 3 | -1 | 4 | |
Net cash provided by (used in) operating activities | 1,192 | 1,170 | 1,183 | |
Cash flows from investing activities: | ' | ' | ' | |
Purchase of investments | -276 | ' | ' | |
Business acquisitions | -46 | -135 | [1] | ' |
Additions to plant and equipment | -62 | -74 | -56 | |
Sales, maturities and calls of investments | 26 | 0 | ' | |
Net cash provided by (used in) investing activities | -358 | -209 | -56 | |
Cash flows from financing activities: | ' | ' | ' | |
Proceeds from issuance of long-term debt | 500 | 500 | 750 | |
Dividends paid | -823 | -807 | -723 | |
Shares repurchased | -795 | -578 | -1,586 | |
Debt issuance costs | -4 | -5 | -9 | |
Proceeds from exercise of stock options | 9 | 5 | 8 | |
Excess tax benefits from share-based arrangements | 13 | 10 | 4 | |
Net cash provided by (used in) financing activities | -1,100 | -875 | -1,556 | |
Change in cash and cash equivalents | -266 | 86 | -429 | |
Cash and cash equivalents, beginning of year | 1,720 | 1,634 | 2,063 | |
Cash and cash equivalents, end of year | 1,454 | 1,720 | 1,634 | |
Cash paid for income taxes | 712 | 580 | 671 | |
Cash paid for interest, net of cash received from interest rate swaps of $24 in 2013, $24 in 2012 and $24 in 2011 | $164 | $144 | $109 | |
[1] | $125 million reflected as cash flows used by Parent consists of a loan from Parent to a Non-guarantor Subsidiary. |
CONSOLIDATED_STATEMENTS_OF_CAS1
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net of cash received from interest rate swaps | $24 | $24 | $24 |
Significant_Accounting_Policie
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2013 | |
Significant Accounting Policies | ' |
1. Significant Accounting Policies | |
Basis of presentation—Lorillard, Inc., through its subsidiaries, is engaged in the manufacture and sale of cigarettes and electronic cigarettes. Its principal products are marketed under the brand names of Newport, Kent, True, Maverick and Old Gold with substantially all of its sales in the United States of America. On April 24, 2012 Lorillard acquired blu eCigs, an electronic cigarette brand in the US. On October 1, 2013, Lorillard acquired SKYCIG, a United Kingdom-based electronic cigarette business. Newport, Kent, True, Maverick, Old Gold, blu eCigs and SKYCIG are the registered trademarks of Lorillard, Inc. and its subsidiaries. | |
The consolidated financial statements of Lorillard, Inc. (the “Company”), together with its subsidiaries (“Lorillard” or “we” or “us” or “our”), include the accounts of the Company and its subsidiaries after the elimination of intercompany accounts and transactions. | |
The Company has two reportable segments – Cigarettes and Electronic Cigarettes. The Cigarettes segment consists principally of the operations of Lorillard Tobacco Company (“Lorillard Tobacco” or “Issuer”) and related entities. The Electronic Cigarettes segment consists of the operations of LOEC, Inc. (d/b/a blu eCigs), (“LOEC” or “blu eCigs”), Cygnet UK Trading Limited (t/a SKYCIG) (“Cygnet” or “SKYCIG”) and related entities. | |
Use of estimates—The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and related notes. Significant estimates in the consolidated financial statements and related notes include: (1) accruals for tobacco settlement costs, litigation, sales incentive programs, income taxes and share-based compensation, (2) the determination of discount and other rate assumptions for defined benefit pension and other postretirement benefit expenses, (3) the valuation of pension assets and (4) the valuation of goodwill and intangible assets. Actual results could differ from those estimates. | |
Cash equivalents—Cash equivalents consist of short-term liquid investments with a maturity at date of purchase of 90 days or less. Interest and dividend income are included in investment income. | |
Short-term and Long-term Investments—Our short-term and long-term investments consist of investment grade debt securities, all of which are classified as available for sale. Available for sale securities are recorded at fair value, and unrealized holding gains and losses are recorded, net of tax, as a component of accumulated other comprehensive income. Available for sale securities with remaining maturities of less than one year and those identified by management at the time of purchase to be used to fund operations within one year are classified as short-term. All other available for sale securities are classified as long-term. Unrealized losses are charged against net earnings when a decline in fair value is determined to be other than temporary. We review several factors to determine whether a loss is other than temporary, such as the length and extent of the fair value decline, the financial condition and near term prospects of the issuer, and whether we have the intent to sell or will likely be required to sell before the anticipated recovery of the securities, which may be at maturity. Realized gains and losses are accounted for using the specific identification method, and are recorded as a component of investment income in the accompanying consolidated statements of income. Purchases and sales are recorded on a trade date basis. | |
Inventories—Cigarette inventories (including leaf tobacco, manufactured stock and materials and supplies) are valued at the lower of cost, determined on a last-in, first-out (“LIFO”) basis, or market. A significant portion of leaf tobacco on hand will not be sold or used within one year, due to the duration of the aging process. All inventory of leaf tobacco, including the portion that has an operating cycle that exceeds 12 months, is classified as a current asset as is a generally recognized trade practice. Electronic cigarette inventories are valued at the lower of cost, determined on a first-in, first-out (“FIFO”) basis, or market and are included in manufactured stock. | |
Depreciation—Buildings, machinery and equipment are depreciated for financial reporting purposes on the straight-line method over estimated useful lives of those assets of 40 years for buildings and 3 to 12 years for machinery and equipment. | |
Derivative agreements—In September 2009, Lorillard Tobacco entered into interest rate swap agreements, which the Company guaranteed, with a total notional amount of $750 million. The interest rate swap agreements qualify for hedge accounting and were designated as fair value hedges. Under the swap agreements, Lorillard Tobacco receives a fixed rate settlement and pays a variable rate settlement with the difference recorded in interest expense. Changes in the fair value of the swap agreements are recorded in other assets or other liabilities with an offsetting adjustment to the carrying amount of the hedged debt. See Notes 10 and 13. | |
Business Combinations—Lorillard utilizes the acquisition method in accounting for business combinations whereby the amount of purchase price that exceeds the fair value of the acquired assets and assumed liabilities is allocated to goodwill. Lorillard recognizes intangible assets apart from goodwill if they arise from contractual or other legal rights, or if they are capable of being separated or divided from the acquired entity and sold, transferred, licensed, rented or exchanged. Assumptions and estimates are used in determining the fair value of assets acquired and liabilities assumed in a business combination. Valuation of intangible assets acquired requires that we use significant judgment in determining fair value, whether such intangibles are amortizable and, if the asset is amortizable, the period and the method by which the intangible asset will be amortized. On April 24, 2012, the Company acquired blu eCigs and other assets used in the manufacture, distribution, development, research, marketing, advertising, and sale of electronic cigarettes. On October 1, 2013, the Company acquired certain of the assets and operations of SKYCIG, a United Kingdom based electronic cigarette business. Changes in the initial assumptions could lead to changes in amortization or impairment charges recorded in our consolidated financial statements. With regard to the SKYCIG acquisition, estimates for the preliminary purchase price and the preliminary purchase price allocation may change as subsequent information becomes available. See Notes 2 and 6 to the Consolidated Financial Statements for additional disclosure about the acquisitions and the purchase price allocations. | |
Goodwill and Intangible Assets—Goodwill is evaluated using a two-step impairment test at the reporting unit level. The first step of the goodwill impairment test compares the book value of a reporting unit, including goodwill, with its fair value. If the book value of a reporting unit exceeds its fair value, we perform the second step of the impairment test. In the second step, we estimate an implied fair value of the reporting unit’s goodwill by allocating the fair value of the reporting unit to all of the assets and liabilities other than goodwill. The difference between the total fair value of the reporting unit and the fair value of all of the assets and liabilities other than goodwill is the implied fair value of that goodwill. The amount of impairment loss is equal to the excess of the book value of the goodwill over the implied fair value of that goodwill. | |
The fair value of our indefinite lived trademark and trade name are estimated utilizing the relief from royalty method, and compared to the carrying value. The main assumptions utilized in the relief from royalty method are projected revenues from our long range plan, assumed royalty rates that could be payable if we did not own the trademarks and a discount rate. We recognize an impairment loss when the estimated fair value of the indefinite lived intangible asset is less than its carrying value. | |
Accumulated other comprehensive income (loss)—The components of accumulated other comprehensive income (loss) (“AOCI”) are unamortized actuarial gains and losses and prior service costs related to Lorillard’s defined benefit pension and postretirement plans, unrealized holding gains and losses on our investments and foreign currency translation adjustments. The unamortized actuarial gains and losses and prior service costs are recognized in net periodic benefit costs over the estimated service lives of covered employees. | |
Foreign Currency Translation—Foreign currency denominated assets and liabilities are translated into United States dollars at exchange rates existing at the respective balance sheet dates. Translation adjustments resulting from fluctuations in exchange rates are recorded as a separate component of other comprehensive income (loss) within stockholders’ equity. The results of operations of foreign subsidiaries are translated at the average exchange rates during the respective periods. Gains and losses resulting from foreign currency transactions are included in net earnings. | |
Revenue recognition—Revenue from product sales, net of sales incentives, is recognized at the time ownership of the goods transfers to customers and collectability is reasonably assured. Federal excise taxes are recognized on a gross basis, and are reflected in both net sales and cost of sales. Sales incentives include retail price discounts, coupons and retail display allowances and are recorded as a reduction of revenue based on amounts estimated as due to customers and consumers at the end of a period based primarily on use and redemption rates. Sales to one customer represented 29%, 29%, and 28% of Lorillard’s revenues in 2013, 2012 and 2011, respectively. Our largest selling brand, Newport, accounted for approximately 85.4%, 87.0%, and 88.4% of consolidated net sales of Lorillard in 2013, 2012, and 2011, respectively. | |
Cost of sales—Cost of sales includes federal excise taxes, leaf tobacco cost, wrapping and casing material, manufacturing labor and production salaries, wages and overhead, research and development costs, distribution, other manufacturing costs, State Settlement Agreement expenses, the federal assessment for tobacco growers, Food and Drug Administration fees, promotional product expenses and electronic cigarette raw materials and manufacturing costs. Promotional product expenses include the cost, including excise taxes, of the free portion of “buy some get some free” promotions. We purchased approximately 86%, 90% and 88% of our leaf tobacco through a limited number of suppliers in 2013, 2012 and 2011, respectively. | |
Advertising and marketing costs—Advertising costs are recorded as expense in the year incurred. Marketing and advertising costs that include such items as direct mail, advertising, agency fees and point of sale materials are included in selling, general and administrative expenses. Advertising expense was $84 million $54 million and $41 million for the years ended December 31, 2013, 2012, and 2011, respectively. | |
Research and development costs—Research and development costs are recorded as expense as incurred, are included in cost of sales and amounted to $21 million $20 million, and $22 million for each of the years ended December 31, 2013, 2012, and 2011, respectively. | |
Tobacco settlement costs—Lorillard recorded pre-tax charges of $1.241 billion, $1.379 billion, and $1.307 billion for the years ended December 31, 2013, 2012, and 2011, respectively, to accrue its obligations under the State Settlement Agreements (see Note 23). Lorillard’s portion of ongoing adjusted settlement payments and legal fees is based on its share of total domestic cigarette shipments in that year. Accordingly, Lorillard records its portion of ongoing adjusted settlement payments as part of cost of sales as the related sales occur. Payments are made annually and are generally due in April of the year following the accrual of costs. The settlement cost liability on the balance sheets represents the unpaid portion of the Company’s obligations under the State Settlement Agreements. | |
Share-Based compensation costs—Under the 2008 Incentive Compensation Plan, the fair market value of the restricted shares and restricted stock units and the exercise price of stock options is based on the closing price at the date of the grant. Share-based compensation expense is recognized net of an estimated forfeiture rate and for shares expected to vest, using a straight-line basis over the requisite service period of the award. | |
Legal costs and loss contingencies—Legal costs are expensed as incurred and amounted to $146 million, $160 million and $140 million for the years ended December 31, 2013, 2012, and 2011, respectively. Lorillard establishes accruals in accordance with Accounting Standards Codification Topic 450, Contingencies (“ASC 450”), when a loss contingency is both probable and can be reasonably estimated as a charge to selling, general and administrative expense. There are a number of factors impacting Lorillard’s ability to estimate the possible loss or a range of loss, including the specific facts of each matter; the legal theories proffered by plaintiffs and legal defenses available to Lorillard Tobacco and Lorillard, Inc.; the wide-ranging outcomes reached in similar cases; differing procedural and substantive laws in the various jurisdictions in which lawsuits have been filed, including whether punitive damages may be pursued or are permissible; the degree of specificity in a plaintiff’s complaint; the history of the case and whether discovery has been completed; plaintiffs’ history of use of Lorillard Tobacco’s cigarettes relative to those of the other defendants; the attribution of damages, if any, among multiple defendants; the application of contributory and/or comparative negligence to the allocation of damage awards among plaintiffs and defendants; the likelihood of settlements for de minimis amounts prior to trial; the likelihood of success at trial; the likelihood of success on appeal; and the impact of current and pending state and federal appellate decisions. It has been Lorillard’s experience and is its continued expectation that the above complexities and uncertainties will not be clarified until the late stages of litigation. For those reasonably possible loss contingencies for which an estimate of the possible loss or range of loss cannot be made, Lorillard discloses the nature of the litigation and any developments as appropriate. See Note 23 for a description of loss contingencies. | |
Income taxes—Deferred tax assets and liabilities are determined based on the differences between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Judgment is required in determining income tax provisions and in evaluating tax positions. For uncertain tax positions to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Where applicable, interest related to uncertain tax positions is recognized in interest expense. Penalties, if incurred, are recognized as a component of income tax expense. Accrued interest and penalties are recorded as a component of other liabilities in the accompanying consolidated balance sheets. | |
Recently adopted accounting pronouncements—Lorillard adopted ASU 2011-04 “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS.” ASU 2011-04 clarifies certain areas of the fair value guidance, including application of the highest and best use and valuation premise concepts, measuring the fair value of an instrument classified in a reporting entity’s shareholders’ equity, and quantitative information about unobservable inputs used in a Level 3 fair value measurement. Additionally, ASU 2011-04 contains guidance on measuring the fair value of instruments that are managed within a portfolio, application of premiums and discounts in a fair value measurement, and requires additional disclosures about fair value measurements. The amendments contained in ASU 2011-04 are to be applied prospectively, and ASU 2011-04 is effective for public companies for interim and annual periods beginning after December 15, 2011. ASU 2011-04 did not have a material impact on Lorillard’s financial position or results of operations. | |
Lorillard adopted ASU 2011-05 “Comprehensive Income (Topic 220): Presentation of Comprehensive Income.” ASU 2011-05 requires presentation of comprehensive income in either a single statement of comprehensive income or two separate but consecutive statements. ASU 2011-05 does not change the definitions or the components of net income and other comprehensive income (OCI), when an item must be reclassified from OCI to net income, or the calculation or presentation of earnings per share. The entity still has the choice to either present OCI components before tax with one line amount for tax, or net of taxes. Disclosure of the tax impact for each OCI component is still required. ASU 2011-05 is effective for public companies for reporting periods beginning after December 15, 2011 and must be applied retrospectively. ASU 2011-05 did not have any impact on Lorillard’s financial position or results of operations, but resulted in the presentation of a separate statement of other comprehensive income. | |
In September 2011, the FASB issued ASU 2011-08 “Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment.” ASU 2011-08 gives an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity determines that it is not more likely than not, then performing a two-step impairment test of goodwill is not necessary. ASU 2011-08 is effective for public companies for reporting periods beginning after December 15, 2011. The adoption of ASU 2011-08 did not have a material impact on Lorillard’s financial position or results of operations, but may impact the manner in which Lorillard assesses goodwill for impairment. | |
In July 2012, the FASB issued ASU 2012-02 “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Asset for Impairment.” ASU 2012-02 gives an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances indicates that it is more likely than not that indefinite-lived intangible assets other than goodwill are impaired, before being required to complete a quantitative impairment test. If an entity concludes, after assessing the totality of qualitative factors, that it is more likely than not that the indefinite-lived intangible assets are not impaired, then it is not required to complete a quantitative impairment test whereby the fair value of the indefinite-lived intangible asset would be determined and compared with the carrying amount of the intangible asset. The amendments in this update are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, and early adoption is permitted. The adoption of ASU 2012-02 in the first quarter of 2013 did not have a material impact on Lorillard’s financial position or results of operations, but may impact the manner in which Lorillard assesses indefinite-lived intangible assets for impairment. | |
In February 2013, the FASB issued ASU 2013-02 “Comprehensive Income (Topic 220) – Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income.” ASU 2013-02 requires an entity to provide information about amounts reclassified out of accumulated other comprehensive income. An entity is also required to present either on the face of the financial statements or in the footnotes, significant items reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety. For other items that are not required under U.S. GAAP to be reclassified to net income in their entirety, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. This standard is effective for public entities prospectively for reporting periods beginning after December 15, 2012. The adoption of ASU 2013-02 did not have any impact on Lorillard’s financial position or results of operations, but resulted in disclosure of additional information about amounts reclassified out of accumulated other comprehensive income. For additional information, see Note 19, “Accumulated Other Comprehensive Loss.” |
Acquisitions
Acquisitions | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Acquisitions | ' | ||||
2. Acquisitions | |||||
On April 24, 2012, Lorillard, Inc., through its wholly owned subsidiary, Lorillard Holdings Company, Inc. (“LHCI”), and its subsidiaries acquired blu eCigs and other assets used in the manufacture, distribution, development, research, marketing, advertising, and sale of electronic cigarettes for $135 million in cash. The acquisition was made pursuant to an asset purchase agreement (the “Agreement”) with BLEC, LLC, Intermark Brands, LLC and QSN Technologies, LLC (the “Sellers”). The Agreement contains customary representations, warranties, covenants and indemnities by the Sellers and LHCI. This acquisition provided Lorillard with the blu eCigs brand and an electronic cigarette product line. | |||||
The results of operations of blu eCigs are included in our consolidated financial statements beginning as of April 24, 2012. Lorillard’s consolidated revenues include $226 million and $61 million of sales of blu eCigs during the years ended 2013 and 2012, respectively. blu eCigs had operating income of $7 million and $1 million during the years ended, 2013 and 2012, respectively. Lorillard incurred $6 million of acquisition-related expenses during 2012. | |||||
The fair values of the assets acquired and liabilities assumed at the date of acquisition are summarized below (in millions): | |||||
Assets acquired: | |||||
Current assets: | |||||
Accounts receivable | $ | 2 | |||
Inventories | 15 | ||||
Total current assets | 17 | ||||
Goodwill | 64 | ||||
Intangible assets | 58 | ||||
Total assets | 139 | ||||
Liabilities assumed: | |||||
Current liabilities: | |||||
Accounts and drafts payable | 4 | ||||
Purchase price | $ | 135 | |||
On October 1, 2013, Lorillard acquired certain assets and operations of SKYCIG®, a United Kingdom (“UK”)-based electronic cigarette (e-cigarette) business for approximately £28 million (approximately $46 million) in cash paid at closing and contingent consideration of up to an additional £30 million (approximately $49 million at October 1, 2013 exchange rates) to be paid in 2016 based on the achievement of certain financial performance benchmarks. | |||||
The results of operations of SKYCIG are included in our consolidated financial statements beginning as of October 1, 2013. Lorillard’s consolidated revenues include $4 million of sales of SKYCIG during the year ended 2013. SKYCIG had an operating loss of $7 million since the date of acquisition. Lorillard incurred $4 million of acquisition-related expenses during 2013. | |||||
Lorillard is still in the process of finalizing a working capital adjustment that may increase total consideration transferred by up to $2 million. Therefore, the purchase price and goodwill amounts noted below could increase by up to $2 million as a result of finalizing this working capital adjustment. The fair values of the assets acquired and liabilities assumed at the date of acquisition are summarized below (in millions): | |||||
Assets acquired: | |||||
Current assets: | |||||
Accounts receivable | $ | 2 | |||
Goodwill | 38 | ||||
Intangible assets | 35 | ||||
Total assets | 75 | ||||
Liabilities assumed: | |||||
Current liabilities: | |||||
Accounts and drafts payable | 3 | ||||
Accrued liabilities | 1 | ||||
Total current liabilities | 4 | ||||
Earn out liability | 25 | ||||
Purchase price | $ | 46 | |||
Inventories
Inventories | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Inventories | ' | ||||||||
3. Inventories | |||||||||
Cigarette inventories (including leaf tobacco, manufactured stock and materials and supplies) are valued at the lower of cost, determined on a last-in, first-out (“LIFO”) basis, or market. Electronic cigarette inventories of $85 million and $41 million included in manufactured stock as of December 31, 2013 and 2012, respectively, are valued at the lower of cost, determined on a first-in, first-out (“FIFO”) basis, or market. Inventories consisted of the following: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(In millions) | |||||||||
Leaf tobacco | $ | 349 | $ | 311 | |||||
Manufactured stock | 143 | 94 | |||||||
Materials and supplies | 7 | 5 | |||||||
$ | 499 | $ | 410 | ||||||
If the average cost method of accounting was used for inventories valued on a LIFO basis, inventories would be greater by approximately $264 million and $245 million at December 31, 2013 and 2012, respectively. |
Other_Current_Assets
Other Current Assets | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Current Assets | ' | ||||||||
4. Other Current Assets | |||||||||
Other current assets were as follows: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(In millions) | |||||||||
Appeal bonds | $ | 7 | $ | 7 | |||||
Deposits | 2 | 7 | |||||||
Other current assets | 14 | 6 | |||||||
Total | $ | 23 | $ | 20 | |||||
Plant_and_Equipment_Net
Plant and Equipment, Net | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Plant and Equipment, Net | ' | ||||||||
5. Plant and Equipment, Net | |||||||||
Plant and equipment is stated at historical cost and consisted of the following: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(In millions) | |||||||||
Land | $ | 3 | $ | 3 | |||||
Buildings | 104 | 95 | |||||||
Equipment | 684 | 657 | |||||||
Total | 791 | 755 | |||||||
Accumulated depreciation | (475 | ) | (457 | ) | |||||
Plant and equipment, net | $ | 316 | $ | 298 | |||||
Depreciation expense was $44 million, $39 million, and $37 million for 2013, 2012, and 2011, respectively. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 12 Months Ended | ||||||||||||||
Dec. 31, 2013 | |||||||||||||||
Goodwill and Intangible Assets | ' | ||||||||||||||
6. Goodwill and Intangible Assets | |||||||||||||||
On April 24, 2012, Lorillard completed the acquisition of blu eCigs. For additional information, see Note 2, “Acquisitions.” The purchase price allocation includes $64 million of goodwill and $58 million of intangible assets, $57 million of which was an indefinite lived intangible asset consisting of the blu eCigs trademark and trade name. | |||||||||||||||
We evaluated our goodwill and indefinite lived intangible assets recorded as a part of the blu eCigs reporting unit for impairment as of November 1, 2013. Based on the results of our impairment analysis, no impairment of the blu eCigs goodwill or the blu eCigs trademark or trade name was determined to exist. | |||||||||||||||
There were no changes in blu eCigs goodwill during the year ended December 31, 2013 | |||||||||||||||
On October 1, 2013, Lorillard completed the acquisition of SKYCIG. For additional information, see Note 2, “Acquisitions.” The preliminary purchase price allocation includes $38 million of goodwill and $35 million of intangible assets, $33 million of which is the fair value ascribed to the SKYCIG trademark and trade name. Lorillard is still in the process of finalizing a working capital adjustment that may increase total consideration transferred by up to $2 million. Therefore, the goodwill amount noted below could increase by up to $2 million as a result of finalizing this working capital adjustment. The fair value ascribed to the SKYCIG trademark and trade name in connection with the acquisition is being amortized over an estimated life of 18 months, beginning October 1, 2013, after which amortization charges related to the trademark and trade name will cease. | |||||||||||||||
All goodwill and intangible assets have been recorded as a part of our blu eCigs and SKYCIG reporting units, both of which are components of our Electronic Cigarettes reporting segment. | |||||||||||||||
Goodwill | |||||||||||||||
Goodwill and the changes in goodwill during the period are as follows: | |||||||||||||||
(In millions) | Total | ||||||||||||||
Balance, December 2012 | $ | 64 | |||||||||||||
Purchase of SKYCIG | 38 | ||||||||||||||
Balance, December 2013 | $ | 102 | |||||||||||||
Intangible Assets | |||||||||||||||
Weighted | Cost | Accumulated | Net | ||||||||||||
Average | Amortization | Carrying | |||||||||||||
Amortization | Amount | ||||||||||||||
Period | |||||||||||||||
(Dollars in millions) | |||||||||||||||
Amortizable intangible assets: | |||||||||||||||
blu eCigs Non-compete Agreement and Technology | 5 years | $ | 1 | $ | 1 | $ | — | ||||||||
SKYCIG Non-compete Agreement and Customer List | 5 years | 2 | — | 2 | |||||||||||
SKYCIG trademark and trade name | 18 months | 34 | 6 | 28 | |||||||||||
Amortizable intangible assets, net | 30 | ||||||||||||||
Indefinite-lived intangible assets: | |||||||||||||||
blu eCigs trademark and trade name | 57 | ||||||||||||||
Intangible assets, net | $ | 87 | |||||||||||||
Intangible assets are amortized using the straight-line method. |
Other_Assets
Other Assets | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Assets | ' | ||||||||
7. Other Assets | |||||||||
Other assets were as follows: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(In millions) | |||||||||
Debt issuance costs, net | $ | 26 | $ | 26 | |||||
Interest rate swap | 60 | 111 | |||||||
Prepaid pension | 55 | — | |||||||
Other prepaid assets | 10 | 15 | |||||||
Total | $ | 151 | $ | 152 | |||||
Accrued_Liabilities
Accrued Liabilities | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accrued Liabilities | ' | ||||||||
8. Accrued Liabilities | |||||||||
Accrued liabilities were as follows: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(In millions) | |||||||||
Legal fees | $ | 29 | $ | 23 | |||||
Salaries and other compensation | 20 | 19 | |||||||
Medical and other employee benefit plans | 30 | 33 | |||||||
Consumer rebates | 78 | 87 | |||||||
Sales promotion | 29 | 26 | |||||||
Accrued vendor charges | 3 | 19 | |||||||
Excise and other taxes | 57 | 63 | |||||||
Accrued interest | 34 | 33 | |||||||
Litigation related accruals | 42 | — | |||||||
Other accrued liabilities | 55 | 53 | |||||||
Total | $ | 377 | $ | 356 | |||||
Commitments
Commitments | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments | ' | ||||
9. Commitments | |||||
Lorillard leases certain real estate and transportation equipment under various operating leases. Listed below are future minimum rental payments required under those operating leases with non-cancelable terms in excess of one year. | |||||
December 31, 2013 | |||||
(In millions) | |||||
2014 | $ | 2.3 | |||
2015 | 1.7 | ||||
2016 | 0.8 | ||||
2017 | 0.5 | ||||
2018 | 0.5 | ||||
2019 | 0.2 | ||||
Net Minimum lease payments | $ | 6 | |||
Rental expense for all operating leases was $5 million, $4 million, and $5 million for 2013, 2012, and 2011, respectively. | |||||
At December 31, 2013, Lorillard Tobacco had contractual obligations to purchase leaf tobacco between January 1, 2014 and December 31, 2014 of approximately $90 million. | |||||
At December 31, 2013, Lorillard Tobacco had other contractual purchase obligations of approximately $61 million. These purchase obligations related primarily to agreements to purchase machinery between January 1, 2014 and December 31, 2014. | |||||
At December 31, 2013, blu eCigs had contractual purchase obligations of approximately $16 million. These purchase obligations related primarily to agreements to purchase inventory between January 1, 2014 and December 31, 2014. | |||||
At December 31, 2013, SKYCIG did not have any contractual purchase obligations. |
Fair_Value
Fair Value | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value | ' | ||||||||||||||||
10. Fair Value | |||||||||||||||||
Fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs, with the highest priority given to Level 1, as these are the most transparent or reliable: | |||||||||||||||||
• | Level 1 — Quoted prices for identical instruments in active markets. | ||||||||||||||||
• | Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable directly or indirectly. | ||||||||||||||||
• | Level 3 — Valuations derived from valuation techniques in which one or more significant inputs are unobservable. | ||||||||||||||||
Lorillard is responsible for the valuation process and as part of this process may use data from outside sources in establishing fair value. Lorillard performs due diligence to understand the inputs used or how the data was calculated or derived, and corroborates the reasonableness of external inputs in the valuation process. | |||||||||||||||||
Assets and liabilities measured at fair value on a recurring basis at December 31, 2013 were as follows: | |||||||||||||||||
(In millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash and Cash Equivalents: | |||||||||||||||||
Prime money market funds | $ | 1,454 | $ | — | $ | — | $ | 1,454 | |||||||||
Total cash and cash equivalents | $ | 1,454 | $ | — | $ | — | $ | 1,454 | |||||||||
Short-term investments: | |||||||||||||||||
Corporate debt securities | $ | — | $ | 63 | $ | — | $ | 63 | |||||||||
U.S. Government agency obligations | — | 59 | — | 59 | |||||||||||||
Commercial paper | — | 22 | — | 22 | |||||||||||||
International government obligations | — | 13 | — | 13 | |||||||||||||
Total short-term investments | $ | — | $ | 157 | $ | 157 | |||||||||||
Long-term investments: | |||||||||||||||||
Corporate debt securities | $ | — | $ | 86 | $ | — | $ | 86 | |||||||||
U.S. Government agency obligations | — | 7 | — | 7 | |||||||||||||
Total long-term investments | $ | — | $ | 93 | $ | — | $ | 93 | |||||||||
Derivative Asset: | |||||||||||||||||
Interest rate swaps — fixed to floating rate | $ | — | $ | 60 | $ | — | $ | 60 | |||||||||
Other liabilities: | |||||||||||||||||
SKYCIG earn out liability | $ | — | $ | — | $ | 25 | $ | 25 | |||||||||
Assets and liabilities measured at fair value on a recurring basis at December 31, 2012 were as follows: | |||||||||||||||||
(In millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash and Cash Equivalents: | |||||||||||||||||
Prime money market funds | $ | 1,720 | $ | — | $ | — | $ | 1,720 | |||||||||
Total cash and cash equivalents | $ | 1,720 | $ | — | $ | — | $ | 1,720 | |||||||||
Derivative Asset: | |||||||||||||||||
Interest rate swaps — fixed to floating rate | $ | — | $ | 111 | $ | — | $ | 111 | |||||||||
Total derivative asset | $ | — | $ | 111 | $ | — | $ | 111 | |||||||||
The fair value of the money market funds, classified as Level 1, utilized quoted prices in active markets. | |||||||||||||||||
The fair value of the interest rate swaps, classified as Level 2, utilized a market approach model using the notional amount of the interest rate swap and observable inputs of time to maturity and market interest rates. See Note 13, “Derivative Instruments,” for additional information on the interest rate swaps. | |||||||||||||||||
Short-term and long-term investments include corporate debt securities, U.S. Government agency obligations, commercial paper and international government obligations. The fair value of corporate debt securities, U.S. Government agency obligations, commercial paper and international government obligations, classified as Level 2, utilized quoted prices for identical assets in less active markets or quoted prices for similar assets in active markets. | |||||||||||||||||
There were no transfers between levels within the fair value hierarchy. There were no Level 3 purchases, sales, issuances or settlements of these assets and liabilities for the years ended 2013 and 2012, with the exception of the incurrence of the earn out liability associated with the acquisition of SKYCIG. | |||||||||||||||||
Proceeds from sales, maturities and calls of available for sale securities were $26 million for the twelve months ended December 31, 2013. There were no proceeds from sales, maturities and calls of available for sale securities for the twelve months ended December 31, 2012. For the twelve months ended December 31, 2013, realized gains and losses on sales, maturities and calls of available for sale securities were not material. There were no realized gains and losses on sales, maturities and calls of available for sale securities for the twelve months ended December 31, 2012. | |||||||||||||||||
The fair value of the SKYCIG earn out liability (the “Earn Out”), classified as Level 3 was determined utilizing a discounted cash flows approach using various probability-weighted SKYCIG 2015 financial performance scenarios, upon which the ultimate earn out liability to be paid in 2016 will be based. Significant unobservable inputs used in calculating the fair value of the Earn Out include various SKYCIG financial performance scenarios, the probability of achieving those scenarios, and the discount rate. Based upon this calculation, the fair value of the Earn Out was determined to be £15 million (approximately $25 million), as of the date of the acquisition (October 1, 2013) and December 31, 2013. The amount of the Earn Out that will be ultimately paid in 2016 could range from £0 to £30 million (approximately $0 to $49 million at December 31, 2013 exchange rates). Changes in the fair value of the Earn Out are recorded as a component of selling, general and administrative expenses of the Electronic Cigarettes segment. See Note 2, “Acquisitions” for additional information related to the acquisition of SKYCIG. |
Credit_Agreement
Credit Agreement | 12 Months Ended |
Dec. 31, 2013 | |
Credit Agreement | ' |
11. Credit Agreement | |
On July 10, 2012, Lorillard Tobacco, the principal, wholly owned operating subsidiary of the Company, terminated its three year $185 million credit agreement (the “Old Revolver”), dated March 26, 2010, and entered into a $200 million revolving credit facility that expires on July 10, 2017 (the “Revolver”) and is guaranteed by the Company. The Revolver may be increased to $300 million upon request. Proceeds from the Revolver may be used for general corporate and working capital purposes. The interest rates on borrowings under the Revolver are based on prevailing interest rates and, in part, upon the credit rating applicable to the Company’s senior unsecured long-term debt. | |
The Revolver requires that the Company maintain a ratio of debt to net income plus income taxes, interest expense, depreciation and amortization expense, any extraordinary losses, any non-cash expenses or losses and any losses on sales of assets outside of the ordinary course of business (“Adjusted EBITDA”) of not more than 2.25 to 1 and a ratio of Adjusted EBITDA to interest expense of not less than 3.0 to 1. In addition, the Revolver contains other affirmative and negative covenants customary for facilities of this type. The Revolver contains customary events of default, including upon a change in control (as defined therein), that could result in the acceleration of all amounts and cancellation of all commitments outstanding under the Revolver. | |
As of December 31, 2013, Lorillard was in compliance with all financial covenants and there were no borrowings under the Revolver. |
LongTerm_Debt
Long-Term Debt | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Long-Term Debt | ' | ||||||||
12. Long-Term Debt | |||||||||
Long-term debt, net of interest rate swaps, consisted of the following: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
(In millions) | |||||||||
2016 Notes—3.500% Notes due 2016 | $ | 500 | $ | 500 | |||||
2017 Notes—2.300% Notes due 2017 | 500 | 500 | |||||||
2019 Notes—8.125% Notes due 2019 | 810 | 861 | |||||||
2020 Notes—6.875% Notes due 2020 | 750 | 750 | |||||||
2023 Notes—3.750% Notes due 2023 | 500 | — | |||||||
2040 Notes—8.125% Notes due 2040 | 250 | 250 | |||||||
2041 Notes—7.000% Notes due 2041 | 250 | 250 | |||||||
Total long-term debt | $ | 3,560 | $ | 3,111 | |||||
In August 2011, Lorillard Tobacco issued $750 million of unsecured senior notes in two tranches pursuant to an Indenture, dated June 23, 2009 (the “Indenture”), and the Third Supplemental Indenture, dated August 4, 2011. The first tranche was $500 million aggregate principal amount of 3.500% Notes due August 4, 2016 (the “2016 Notes”) and the second tranche was $250 million aggregate principal amount of 7.000% Notes due August 4, 2041 (the “2041 Notes”). The net proceeds from the issuance were used for the repurchase of the Company’s common stock. | |||||||||
In August 2012, Lorillard Tobacco issued $500 million aggregate principal amount of 2.300% unsecured senior notes due August 21, 2017 (the “2017 Notes”) pursuant to the Indenture and the Fourth Supplemental Indenture, dated August 21, 2012. The net proceeds from the issuance were used for the repurchase of the Company’s common stock. | |||||||||
In May 2013, Lorillard Tobacco issued $500 million aggregate principal amount of 3.750% unsecured senior notes due May 20, 2023 (the “2023 Notes”) pursuant to the Indenture and the Fifth Supplemental Indenture, dated May 20, 2013. The net proceeds from the issuance will be used for general corporate purposes, which may include, among other things, the repurchase, redemption or retirement of securities including the Company’s common stock, acquisitions, additions to working capital and capital expenditures. | |||||||||
Lorillard Tobacco is the principal, 100% owned operating subsidiary of the Company, and the $750 million aggregate principal amount of 8.125% senior notes issued in June 2009 and due 2019 (the “2019 Notes”), $750 million aggregate principal amount of 6.875% senior notes due 2020 and $250 million aggregate principal amount of 8.125% senior notes due 2040 and issued in April 2010 (the “2020 Notes” and “2040 Notes,” respectively), 2016 Notes, 2017 Notes, 2023 Notes and 2041 Notes (together, the “Notes”) are unconditionally guaranteed on a senior unsecured basis by the Company. | |||||||||
The interest rate payable on the 2019 Notes is subject to incremental increases from 0.25% to 2.00% in the event either Moody’s Investors Services, Inc. (“Moody’s”), Standard & Poor’s Ratings Services (“S&P”) or both Moody’s and S&P downgrade the 2019 Notes below investment grade (Baa3 and BBB- for Moody’s and S&P, respectively). As of December 31, 2013, our debt ratings were Baa2 and BBB- with Moody’s and S&P, respectively, both of which are investment grade. | |||||||||
Upon the occurrence of a change of control triggering event, Lorillard Tobacco would be required to make an offer to repurchase the Notes at a price equal to 101% of the aggregate principal amount of the Notes, plus accrued interest. A “change of control triggering event” occurs when there is both a “change of control” (as defined in the Supplemental Indentures) and the Notes cease to be rated investment grade by both Moody’s and S&P within 60 days of the occurrence of a change of control or public announcement of the intention to effect a change of control. The Notes are not entitled to any sinking fund and are not redeemable prior to maturity. The Notes contain covenants that restrict liens and sale and leaseback transactions, subject to a limited exception. At December 31, 2013 and December 31, 2012, the carrying value of the Notes was $3.560 billion and $3.111 billion, respectively, and the estimated fair value was $3.872 billion and $3.512 billion, respectively. The fair value of the Notes is based on market pricing. The fair value of the Notes, classified as Level 1, utilized quoted prices in active markets. |
Derivative_Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2013 | |
Derivative Instruments | ' |
13. Derivative Instruments | |
In September 2009, Lorillard Tobacco entered into interest rate swap agreements, which the Company guaranteed, with a total notional amount of $750 million to modify its exposure to interest rate risk by effectively converting the interest rate payable on the 2019 Notes from a fixed rate to a floating rate. Under the agreements, Lorillard Tobacco receives interest based on a fixed rate of 8.125% and pays interest based on a floating one-month LIBOR rate plus a spread of 4.625%. The variable rates were 4.793% and 4.840% as of December 31, 2013 and 2012, respectively. The agreements expire in June 2019. The interest rate swap agreements qualify for hedge accounting and were designated as fair value hedges. Under the swap agreements, Lorillard Tobacco receives a fixed rate settlement and pays a variable rate settlement with the difference recorded in interest expense. That difference reduced interest expense by $24 million in 2013, 2012 and 2011. | |
For derivatives designated as fair value hedges, which relate entirely to hedges of long-term debt, changes in the fair value of the derivatives are recorded in other assets or other liabilities with an offsetting adjustment to the carrying amount of the hedged debt. At December 31, 2013 and 2012, the adjusted carrying amounts of the hedged debt were $810 million and $861 million, respectively and the amounts included in other assets were $60 million and $111 million, respectively. | |
If our debt rating is downgraded below Ba2 by Moody’s or BB by S&P, the swap agreements will terminate and we will be required to settle them in cash before their expiration date. As of December 31, 2013, our debt ratings were Baa2 and BBB- with Moody’s and S&P, respectively, both of which are above the ratings at which settlement of our derivative contracts would be required. |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Earnings Per Share | ' | ||||||||||||
14. Earnings Per Share | |||||||||||||
Basic and diluted earnings per share (“EPS”) were calculated using the following: | |||||||||||||
Year Ended | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
(In millions) | |||||||||||||
Numerator: | |||||||||||||
Net income, as reported | $ | 1,180 | $ | 1,099 | $ | 1,116 | |||||||
Less: Net income attributable to participating securities | (3 | ) | (3 | ) | (3 | ) | |||||||
Net income available to common shareholders | $ | 1,177 | $ | 1,096 | $ | 1,113 | |||||||
Denominator: | |||||||||||||
Basic EPS – weighted average shares | 372.96 | 389.27 | 417.32 | ||||||||||
Effect of dilutive securities: | |||||||||||||
Stock Options and SARS | 0.75 | 0.86 | 0.74 | ||||||||||
Diluted EPS – adjusted weighted average shares and assumed conversions | 373.71 | 390.13 | 418.06 | ||||||||||
Earnings Per Share: | |||||||||||||
Basic | $ | 3.15 | $ | 2.82 | $ | 2.67 | |||||||
Diluted | $ | 3.15 | $ | 2.81 | $ | 2.66 | |||||||
Options to purchase 0.1 million shares of common stock were excluded from the diluted earnings per share calculation because their effect would be anti-dilutive for the year ended December 31, 2011. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Taxes | ' | ||||||||||||
15. Income Taxes | |||||||||||||
Prior to the separation from Loews in 2008 (the “Separation”), Lorillard was included in the Loews consolidated federal income tax return, and federal income tax liabilities were included on the balance sheet of Loews. Under the terms of the pre-Separation Tax Allocation Agreement between Lorillard and Loews, Lorillard made payments to, or was reimbursed by Loews for the tax effects resulting from its inclusion in Loews’ consolidated federal income tax return. As of December 31, 2013, there were no tax obligations between Lorillard and Loews for periods prior to the Separation. Following the Separation, Lorillard and its eligible subsidiaries filed a stand-alone consolidated federal income tax return. | |||||||||||||
The Separation Agreement with Loews (the “Separation Agreement”) requires Lorillard (and any successor entity) to indemnify Loews for any losses resulting from the failure of the Separation to qualify as a tax-free transaction (except if the failure to qualify is solely due to Loews’ fault). This indemnification obligation applies regardless of whether Lorillard or a potential acquirer obtains a supplemental ruling or an opinion of counsel. | |||||||||||||
The Separation Agreement further provides for cooperation between Lorillard and Loews with respect to additional tax matters, including the exchange of information and the retention of records which may affect the income tax liability of the parties to the Separation Agreement. | |||||||||||||
The provision (benefit) for income taxes consisted of the following: | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
(In millions) | |||||||||||||
Current | |||||||||||||
Federal | $ | 606 | $ | 530 | $ | 548 | |||||||
State | 140 | 111 | 120 | ||||||||||
Foreign | — | — | — | ||||||||||
Deferred | |||||||||||||
Federal | (36 | ) | (10 | ) | (10 | ) | |||||||
State | (5 | ) | (2 | ) | (4 | ) | |||||||
Foreign | (1 | ) | — | — | |||||||||
Total | $ | 704 | $ | 629 | $ | 654 | |||||||
Pre-tax income (loss) for domestic and foreign operations is as follows: | |||||||||||||
(In millions) | 2013 | 2012 | 2011 | ||||||||||
Domestic | $ | 1,891 | $ | 1,728 | $ | 1,770 | |||||||
Foreign | (7 | ) | — | — | |||||||||
$ | 1,884 | $ | 1,728 | $ | 1,770 | ||||||||
Total income tax expense for the years ended December 31, 2013, 2012, and 2011 was different than the amounts of $659 million, $605 million, and $620 million, computed by applying the statutory U.S. federal income tax rate of 35% to income before taxes for each of the years. | |||||||||||||
A reconciliation between the statutory federal income tax rate and Lorillard’s effective income tax rate as a percentage of income is as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Statutory rate | 35 | % | 35 | % | 35 | % | |||||||
Increase (decrease) in rate resulting from: | |||||||||||||
State taxes | 4.7 | 4.1 | 4.3 | ||||||||||
Domestic manufacturer’s deduction | (2.7 | ) | (2.8 | ) | (2.4 | ) | |||||||
Other | 0.4 | 0.1 | 0.1 | ||||||||||
Effective rate | 37.4 | % | 36.4 | % | 37 | % | |||||||
Deferred tax assets (liabilities) are as follows: | |||||||||||||
December 31, | |||||||||||||
(In millions) | 2013 | 2012 | |||||||||||
Deferred tax assets: | |||||||||||||
Employee benefits | $ | 137 | $ | 161 | |||||||||
Settlement costs | 525 | 511 | |||||||||||
State and local income taxes | 22 | 18 | |||||||||||
Litigation and legal | 24 | 6 | |||||||||||
Inventory | 3 | 4 | |||||||||||
Other | 3 | 2 | |||||||||||
Gross deferred tax assets | 714 | 702 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Depreciation | (66 | ) | (63 | ) | |||||||||
Federal effect of state deferred taxes | (42 | ) | (34 | ) | |||||||||
Gross deferred tax liabilities | (108 | ) | (97 | ) | |||||||||
Net deferred tax assets | $ | 606 | $ | 605 | |||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: | |||||||||||||
(In millions) | 2013 | 2012 | 2011 | ||||||||||
Balance at January 1, | $ | 41 | $ | 42 | $ | 33 | |||||||
Additions for tax positions of prior years | 4 | 4 | 6 | ||||||||||
Reductions for tax positions of prior years | (2 | ) | (6 | ) | (2 | ) | |||||||
Additions based on tax positions related to the current year | 10 | 9 | 9 | ||||||||||
Settlements | — | (4 | ) | (1 | ) | ||||||||
Lapse of statute of limitations | (1 | ) | (4 | ) | (3 | ) | |||||||
Balance at December 31, | $ | 52 | $ | 41 | $ | 42 | |||||||
At December 31, 2013, 2012, and 2011, there were $34 million, $27 million, and $28 million, respectively, of tax benefits that, if recognized, would affect the effective tax rate. | |||||||||||||
Lorillard recognizes interest related to unrecognized tax benefits and tax refund claims in interest expense and recognizes penalties (if any) in income tax expense. During the years ended December 31, 2013, 2012, and 2011, Lorillard recognized an expense of approximately $2 million, $2 million, and $2 million in interest and penalties. Lorillard had accrued interest and penalties related to unrecognized tax benefits of $19 million and $16 million at December 31, 2013 and 2012, respectively. | |||||||||||||
Due to the potential for resolution of certain tax examinations and the expiration of various statutes of limitation, it is reasonably possible that Lorillard’s gross unrecognized tax benefits balance may decrease by approximately $12 million in the next twelve months. | |||||||||||||
Lorillard and/or one or more of its subsidiaries file income tax returns in the U.S. federal jurisdiction and various foreign, state and city jurisdictions. Lorillard’s consolidated federal income tax returns for the periods after 2009 are subject to IRS examination, with 2011 currently under examination by the Internal Revenue Service. With few exceptions, Lorillard’s state, local or foreign tax returns are subject to examination by taxing authorities for years after 2008. |
Retirement_Plans
Retirement Plans | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||
Retirement Plans | ' | ||||||||||||||||||||||||||||
16. Retirement Plans | |||||||||||||||||||||||||||||
Lorillard has defined benefit pension, postretirement benefits, profit sharing and savings plans for eligible employees. | |||||||||||||||||||||||||||||
Pension and postretirement benefits—The Salaried Pension Plan provides benefits based on employees’ compensation and service. The Hourly Pension Plan provides benefits based on fixed amounts for each year of service. Lorillard also provides medical and life insurance benefits to eligible employees. Lorillard uses a December 31 measurement date for its plans. | |||||||||||||||||||||||||||||
Lorillard also provides certain senior level management employees with nonqualified, unfunded supplemental retirement plans. While these plans are unfunded, Lorillard has certain assets invested in an executive life insurance policy that are to be used to provide for certain of these benefits. | |||||||||||||||||||||||||||||
Weighted-average assumptions used to determine benefit obligations: | |||||||||||||||||||||||||||||
Pension Benefits | Other | ||||||||||||||||||||||||||||
Postretirement Benefits | |||||||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||
Discount rate | 4.70%-4.90% | 3.90%-4.25% | 4.60%-4.70% | 3.90%-4.00% | |||||||||||||||||||||||||
Rate of compensation increase | 4.25% | 4.25% | |||||||||||||||||||||||||||
Weighted-average assumptions used to determine net periodic benefit cost: | |||||||||||||||||||||||||||||
Pension Benefits | Other Postretirement | ||||||||||||||||||||||||||||
Benefits | |||||||||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | ||||||||||||||||||||||||
Discount rate | 3.90%-4.25% | 4.70%-4.90% | 5.40%-5.75% | 3.90%-4.00% | 4.60%-4.80% | 5.25%-5.50% | |||||||||||||||||||||||
Expected long-term return on plan assets | 7.75% | 7.75% | 7.50% | ||||||||||||||||||||||||||
Rate of compensation increase | 4.25% | 4.75% | 4.75% | ||||||||||||||||||||||||||
The expected long-term rate of return for Plan assets is determined based on widely-accepted capital market principles, long-term return analysis for global fixed income and equity markets and the active total return oriented portfolio management style. The methodology used to derive asset class risk/return estimates varies due to the nature of asset classes, the availability of historical data, implications from currency, and other factors. In many cases, where historical data is available, data is drawn from indices such as Morgan Stanley Capital International (“MSCI”) or G7 country data. For alternative asset classes where historical data may be insufficient or incomplete, estimates are based on long-term capital market conditions and/or asset class relationships. The expected rate of return for the Plan is based on the target asset allocation and return assumptions for each asset class. The estimated Plan return represents a nominal compound return which captures the effect of estimated asset class and market volatility. | |||||||||||||||||||||||||||||
Assumed health care cost trend rates for other postretirement benefits: | |||||||||||||||||||||||||||||
Other Postretirement | |||||||||||||||||||||||||||||
Benefits | |||||||||||||||||||||||||||||
Year Ended | |||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||
Pre-65 health care cost trend rate assumed for next year | 8 | % | 8.5 | % | |||||||||||||||||||||||||
Post-65 health care cost trend rate assumed for next year | 6 | % | 6 | % | |||||||||||||||||||||||||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 4.5 | % | 4.5 | % | |||||||||||||||||||||||||
Year that the rate reaches the ultimate trend rate: | |||||||||||||||||||||||||||||
Pre-65 | 2021 | 2021 | |||||||||||||||||||||||||||
Post-65 | 2021 | 2021 | |||||||||||||||||||||||||||
Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects: | |||||||||||||||||||||||||||||
One Percentage Point | |||||||||||||||||||||||||||||
Increase | Decrease | ||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Effect on postretirement benefit obligations | $ | 15 | $ | 12 | |||||||||||||||||||||||||
Effect on total of service and interest cost | 2 | 1 | |||||||||||||||||||||||||||
Net periodic pension and other postretirement benefit costs include the following components: | |||||||||||||||||||||||||||||
Pension Benefits | Other Postretirement | ||||||||||||||||||||||||||||
Benefits | |||||||||||||||||||||||||||||
Year Ended | Year Ended | ||||||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | ||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Service cost | $ | 26 | $ | 24 | $ | 18 | $ | 6 | $ | 5 | $ | 4 | |||||||||||||||||
Interest cost | 51 | 55 | 56 | 9 | 10 | 10 | |||||||||||||||||||||||
Expected return on plan assets | (82 | ) | (76 | ) | (73 | ) | — | — | — | ||||||||||||||||||||
Amortization of unrecognized net loss (gain) | 21 | 22 | 8 | 1 | — | — | |||||||||||||||||||||||
Amortization of unrecognized prior service cost | 4 | 4 | 4 | — | (1 | ) | (1 | ) | |||||||||||||||||||||
Net periodic benefit cost | $ | 20 | $ | 29 | $ | 13 | $ | 16 | $ | 14 | $ | 13 | |||||||||||||||||
The following provides a reconciliation of benefit obligations, plan assets and funded status of the pension and postretirement plans. | |||||||||||||||||||||||||||||
Pension Benefits | Other | ||||||||||||||||||||||||||||
Postretirement | |||||||||||||||||||||||||||||
Benefits | |||||||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Change in benefit obligation: | |||||||||||||||||||||||||||||
Benefit obligation at January 1 | $ | 1,265 | $ | 1,183 | $ | 230 | $ | 212 | |||||||||||||||||||||
Service cost | 26 | 24 | 6 | 5 | |||||||||||||||||||||||||
Interest cost | 51 | 55 | 9 | 10 | |||||||||||||||||||||||||
Plan participants’ contributions | — | — | 5 | 5 | |||||||||||||||||||||||||
Amendments | — | — | — | 2 | |||||||||||||||||||||||||
Actuarial (gain) loss | (98 | ) | 66 | (19 | ) | 12 | |||||||||||||||||||||||
Benefits paid | (65 | ) | (63 | ) | (18 | ) | (18 | ) | |||||||||||||||||||||
Other | — | — | — | 2 | |||||||||||||||||||||||||
Benefit obligation at December 31 | 1,179 | 1,265 | 213 | 230 | |||||||||||||||||||||||||
Change in plan assets: | |||||||||||||||||||||||||||||
Fair value of plan assets at January 1 | 1,078 | 998 | — | — | |||||||||||||||||||||||||
Actual return on plan assets | 90 | 112 | — | — | |||||||||||||||||||||||||
Employer contributions | 31 | 31 | 13 | 13 | |||||||||||||||||||||||||
Plan participants’ contributions | — | — | 5 | 5 | |||||||||||||||||||||||||
Benefits paid from plan assets | (65 | ) | (63 | ) | (18 | ) | (18 | ) | |||||||||||||||||||||
Fair value of plan assets at December 31 | 1,134 | 1,078 | — | — | |||||||||||||||||||||||||
Funded status | $ | (45 | ) | $ | (187 | ) | $ | (213 | ) | $ | (230 | ) | |||||||||||||||||
Amounts recognized in the balance sheets consist of: | |||||||||||||||||||||||||||||
Noncurrent assets | $ | 55 | $ | — | $ | — | $ | — | |||||||||||||||||||||
Current liabilities | — | — | (14 | ) | (14 | ) | |||||||||||||||||||||||
Noncurrent liabilities | (100 | ) | (187 | ) | (199 | ) | (216 | ) | |||||||||||||||||||||
Net amount recognized | $ | (45 | ) | $ | (187 | ) | $ | (213 | ) | $ | (230 | ) | |||||||||||||||||
Net actuarial (gain) loss | $ | (107 | ) | $ | 30 | $ | (19 | ) | $ | 12 | |||||||||||||||||||
Recognized actuarial gain (loss) | (21 | ) | (22 | ) | (1 | ) | — | ||||||||||||||||||||||
Prior service cost | — | — | — | 2 | |||||||||||||||||||||||||
Recognized prior service cost | (4 | ) | (4 | ) | — | — | |||||||||||||||||||||||
Total recognized in other comprehensive (income) loss | $ | (132 | ) | $ | 4 | $ | (20 | ) | $ | 14 | |||||||||||||||||||
Total recognized net periodic benefit cost and other comprehensive (income) loss | $ | (112 | ) | $ | 33 | $ | (4 | ) | $ | 28 | |||||||||||||||||||
Information for pension plans with an accumulated benefit obligation in excess of plan assets consisted of the following: | |||||||||||||||||||||||||||||
Pension Benefits | |||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Projected benefit obligation | $ | 682 | $ | 1,265 | |||||||||||||||||||||||||
Accumulated benefit obligation | 615 | 1,189 | |||||||||||||||||||||||||||
Fair value of plan assets | 582 | 1,078 | |||||||||||||||||||||||||||
The table below presents the estimated amounts to be recognized from accumulated other comprehensive income into net periodic benefit cost during 2014. | |||||||||||||||||||||||||||||
Pension | Other | ||||||||||||||||||||||||||||
Benefits | Postretirement | ||||||||||||||||||||||||||||
Benefits | |||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Amortization of actuarial (gain) loss | $ | 9 | $ | (1 | ) | ||||||||||||||||||||||||
Amortization of prior service cost | 3 | — | |||||||||||||||||||||||||||
Total estimated amounts to be recognized | $ | 12 | $ | (1 | ) | ||||||||||||||||||||||||
Lorillard projects expected future minimum benefit payments as follows. | |||||||||||||||||||||||||||||
Expected future benefit payments | Pension | Other | Less | Net | |||||||||||||||||||||||||
Benefits | Postretirement | Medicare | |||||||||||||||||||||||||||
Benefit Plans | Drug | ||||||||||||||||||||||||||||
Subsidy | |||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
2014 | $ | 69 | $ | 15 | $ | 1 | $ | 83 | |||||||||||||||||||||
2015 | 71 | 16 | 1 | 86 | |||||||||||||||||||||||||
2016 | 73 | 16 | 1 | 88 | |||||||||||||||||||||||||
2017 | 74 | 16 | 1 | 89 | |||||||||||||||||||||||||
2018 | 76 | 17 | 1 | 92 | |||||||||||||||||||||||||
2019 – 2023 | 404 | 83 | 2 | 485 | |||||||||||||||||||||||||
$ | 767 | $ | 163 | $ | 7 | $ | 923 | ||||||||||||||||||||||
Lorillard expects to contribute $1 million to its pension plans and $15 million to its other postretirement benefit plans in 2014. | |||||||||||||||||||||||||||||
The general principles guiding the investment of the Plan assets are embodied in the Employee Retirement Income Security Act of 1974 (ERISA). These principles include discharging Lorillard’s investment responsibilities for the exclusive benefit of Plan participants and in accordance with the “prudent expert” standards and other ERISA rules and regulations. Investment objectives for Lorillard’s pension Plan assets are to optimize the long-term return on Plan assets while maintaining an acceptable level of risk, to diversify assets among asset classes and investment styles, and to maintain a long-term focus. | |||||||||||||||||||||||||||||
The Plan is managed using a Liability Driven Investment (“LDI”) framework which focuses on achieving the Plan’s return goals while assuming a reasonable level of funded status volatility. | |||||||||||||||||||||||||||||
Based on this LDI framework the asset allocation has two primary components. The first component of the asset allocation is the “hedging portfolio” which uses the Plan’s fixed income portfolio to hedge a portion of the interest rate risk associated with the Plan’s liabilities, thereby reducing the Plan’s expected funded status volatility. The second component is the “growth/equity portfolio” which is designed to enhance portfolio returns. The growth portfolio is broadly diversified across the following asset classes; Global Equities, Long Short Equities, Absolute Return Hedge Funds, Private Equity (including growth equity, buyouts, and other illiquid assets designed to enhance returns), and Private Real Assets. Alternative investments, including hedge funds, are used judiciously to enhance risk adjusted long-term returns while improving portfolio diversification. Overlay derivatives are used to assist in the rebalancing of the total portfolio to the strategic asset allocation. Derivatives may be used to gain market exposure in an efficient and timely manner. Investment risk is measured and monitored on an ongoing basis through annual liability measurements, periodic asset/liability studies, and quarterly investment portfolio reviews. | |||||||||||||||||||||||||||||
The pension plans asset allocations were: | |||||||||||||||||||||||||||||
Asset Allocation as of | Asset Allocation as of | ||||||||||||||||||||||||||||
12/31/13 | 12/31/12 | ||||||||||||||||||||||||||||
(%) | (%) | ||||||||||||||||||||||||||||
Asset Class | |||||||||||||||||||||||||||||
U.S. Equity | 9.4 | 10.6 | |||||||||||||||||||||||||||
Global ex U.S. Equity | 9.6 | 8 | |||||||||||||||||||||||||||
Global ex Emerging Markets Equity | 4.7 | 3.8 | |||||||||||||||||||||||||||
Emerging Markets Equity | 3.9 | 3.7 | |||||||||||||||||||||||||||
Absolute Return Hedge Funds | 16.6 | 13.9 | |||||||||||||||||||||||||||
Equity Hedge Funds | 13.6 | 11.4 | |||||||||||||||||||||||||||
Private Equity | 4.5 | 4.7 | |||||||||||||||||||||||||||
Private Real Assets | 2.9 | 2.2 | |||||||||||||||||||||||||||
Public Real Assets | 2 | 2.3 | |||||||||||||||||||||||||||
Fixed Income | 29.5 | 37.3 | |||||||||||||||||||||||||||
Cash Equivalents | 3.3 | 2.1 | |||||||||||||||||||||||||||
Total | 100 | 100 | |||||||||||||||||||||||||||
Fair Value Measurements—The fair value hierarchy has three levels based on the observability of the inputs used to determine fair value. Level 1 refers to fair values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant other observable inputs. Level 3 includes fair values estimated using significant non-observable inputs. Plan assets using the fair value hierarchy as of December 31, 2013 were as follows: | |||||||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Asset Class: | |||||||||||||||||||||||||||||
U.S. Equity: | |||||||||||||||||||||||||||||
Securities | $ | 111 | $ | 15 | $ | — | $ | 96 | |||||||||||||||||||||
Overlay derivatives liabilities | (5 | ) | — | (5 | ) | — | |||||||||||||||||||||||
Global ex U.S. Equity | 109 | — | 109 | — | |||||||||||||||||||||||||
Global ex Emerging Markets Equity | 53 | — | 31 | 22 | |||||||||||||||||||||||||
Emerging Markets Equity: | |||||||||||||||||||||||||||||
Securities | 28 | — | 28 | — | |||||||||||||||||||||||||
Overlay derivatives assets | 17 | — | 17 | — | |||||||||||||||||||||||||
Absolute Return Hedge Funds | 188 | — | 58 | 130 | |||||||||||||||||||||||||
Equity Hedge Funds | 155 | — | 74 | 81 | |||||||||||||||||||||||||
Private Equity | 51 | — | — | 51 | |||||||||||||||||||||||||
Private Real Assets | 33 | — | — | 33 | |||||||||||||||||||||||||
Public Real Assets | 22 | — | 22 | — | |||||||||||||||||||||||||
Fixed Income: | |||||||||||||||||||||||||||||
Securities | 346 | — | 284 | 62 | |||||||||||||||||||||||||
Overlay derivatives liabilities | (12 | ) | — | (12 | ) | — | |||||||||||||||||||||||
Cash Equivalents | 38 | — | 38 | — | |||||||||||||||||||||||||
Total | $ | 1,134 | $ | 15 | $ | 644 | $ | 475 | |||||||||||||||||||||
Plan assets using the fair value hierarchy as of December 31, 2012 were as follows: | |||||||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Asset Class: | |||||||||||||||||||||||||||||
U.S. Equity: | |||||||||||||||||||||||||||||
Securities | $ | 122 | $ | 49 | $ | — | $ | 73 | |||||||||||||||||||||
Overlay derivatives liabilities | (8 | ) | — | (8 | ) | — | |||||||||||||||||||||||
Global ex U.S. Equity: | |||||||||||||||||||||||||||||
Securities | 93 | — | 93 | — | |||||||||||||||||||||||||
Overlay derivatives liabilities | (6 | ) | — | (6 | ) | — | |||||||||||||||||||||||
Global ex Emerging Markets Equity | 41 | — | 25 | 16 | |||||||||||||||||||||||||
Emerging Markets Equity: | |||||||||||||||||||||||||||||
Securities | 43 | — | 43 | — | |||||||||||||||||||||||||
Overlay derivatives liabilities | (3 | ) | — | (3 | ) | — | |||||||||||||||||||||||
Absolute Return Hedge Funds | 150 | — | 40 | 110 | |||||||||||||||||||||||||
Equity Hedge Funds | 123 | — | 62 | 61 | |||||||||||||||||||||||||
Private Equity | 51 | — | — | 51 | |||||||||||||||||||||||||
Private Real Assets | 24 | — | — | 24 | |||||||||||||||||||||||||
Public Real Assets | 23 | — | 14 | 9 | |||||||||||||||||||||||||
Fixed Income: | |||||||||||||||||||||||||||||
Securities | 375 | 241 | 69 | 65 | |||||||||||||||||||||||||
Overlay derivatives assets | 27 | — | 27 | — | |||||||||||||||||||||||||
Cash Equivalents | 23 | — | 23 | — | |||||||||||||||||||||||||
Total | $ | 1,078 | $ | 290 | $ | 379 | $ | 409 | |||||||||||||||||||||
Equity securities are valued primarily using a market approach based on the quoted market prices of identical instruments. Certain equity securities are valued at their net asset value (“NAV”) per share. | |||||||||||||||||||||||||||||
Real estate values are based on market based comparable data or at their NAVs. | |||||||||||||||||||||||||||||
Fixed income securities are valued primarily using a market approach with inputs based on the quoted market prices of identical instruments and that include broker quotes in a non-active market. | |||||||||||||||||||||||||||||
Cash equivalents are held primarily in registered money market funds which are valued at their NAVs calculated using the amortized cost of the securities and have daily liquidity. | |||||||||||||||||||||||||||||
Certain of our plan assets, classified in U.S. Equity Securities, Absolute Return Hedge Funds, Equity Hedge Funds, Private Equity, Private Real Assets and Fixed Income Securities, do not have readily determinable market values given the specific investment structures involved and the nature of the underlying investments. For the December 31, 2013 and 2012 plan asset reporting, publicly traded asset pricing was used where possible. For assets without readily determinable values, reported NAVs or their equivalent were provided by the respective investment sponsors or investment manager and subsequently reviewed and approved by management. For those investments reported on a one-quarter lagged basis (primarily Private Equity and Private Real Assets), NAVs or their equivalent are adjusted for subsequent cash flows and significant events. | |||||||||||||||||||||||||||||
The following table presents a reconciliation of Level 3 assets held during the year ended December 31, 2013. For the year ended December 31, 2013, there were no significant transfers between levels 1, 2 and 3. | |||||||||||||||||||||||||||||
January 1, | Realized | Unrealized | Purchases | Sales | Net | December 31, | |||||||||||||||||||||||
2013 | Gains/ | Gains/ | Transfers | 2013 | |||||||||||||||||||||||||
Balance | (Losses) | (Losses) | Into/(Out of) | Balance | |||||||||||||||||||||||||
Level 3 | |||||||||||||||||||||||||||||
US Equity | $ | 73 | $ | (1 | ) | $ | 23 | $ | 9 | $ | (8 | ) | $ | — | $ | 96 | |||||||||||||
Global ex Emerging Markets Equity | 16 | — | 6 | — | — | — | 22 | ||||||||||||||||||||||
Absolute Return Hedge Funds | 110 | 2 | 16 | 12 | (10 | ) | — | 130 | |||||||||||||||||||||
Equity Hedge Funds | 61 | — | 11 | 25 | (16 | ) | — | 81 | |||||||||||||||||||||
Private Equity | 51 | 3 | 5 | 6 | (14 | ) | — | 51 | |||||||||||||||||||||
Private Real Assets | 24 | 2 | 4 | 11 | (8 | ) | — | 33 | |||||||||||||||||||||
Public Real Assets | 9 | (1 | ) | 1 | — | (9 | ) | — | — | ||||||||||||||||||||
Fixed Income | 65 | — | (3 | ) | — | — | — | 62 | |||||||||||||||||||||
The following table presents a reconciliation of Level 3 assets held during the year ended December 31, 2012. For the year ended December 31, 2012, there were no significant transfers between levels 1, 2 and 3. | |||||||||||||||||||||||||||||
January 1, | Realized | Unrealized | Purchases | Sales | Net | December 31, | |||||||||||||||||||||||
2012 | Gains/ | Gains/ | Transfers | 2012 | |||||||||||||||||||||||||
Balance | (Losses) | (Losses) | Into/(Out of) | Balance | |||||||||||||||||||||||||
Level 3 | |||||||||||||||||||||||||||||
US Equity | $ | 66 | $ | — | $ | 12 | $ | — | $ | (5 | ) | $ | — | $ | 73 | ||||||||||||||
Global ex Emerging Markets Equity | — | — | 1 | 15 | — | — | 16 | ||||||||||||||||||||||
Absolute Return Hedge Funds | 80 | 2 | 7 | 29 | (8 | ) | — | 110 | |||||||||||||||||||||
Equity Hedge Funds | 50 | — | 2 | 13 | (4 | ) | — | 61 | |||||||||||||||||||||
Private Equity | 47 | 1 | 5 | 9 | (10 | ) | (1 | ) | 51 | ||||||||||||||||||||
Private Real Assets | 16 | 1 | 1 | 10 | (4 | ) | — | 24 | |||||||||||||||||||||
Public Real Assets | 9 | — | — | — | — | — | 9 | ||||||||||||||||||||||
Fixed Income | — | — | — | 65 | — | — | 65 | ||||||||||||||||||||||
Profit Sharing—Lorillard has a Profit Sharing Plan for hourly employees. Lorillard’s contributions under this plan are based on Lorillard’s performance with a maximum contribution of 15% of participants’ earnings. Contributions for 2013, 2012, and 2011 were $11 million, $11 million, and $11 million, respectively. | |||||||||||||||||||||||||||||
Savings Plan—Lorillard sponsors an Employees Savings Plan for salaried employees. Lorillard provides a matching contribution of 100% of the first 3% of pay contributed and 50% of the next 2% of pay contributed by employees. Lorillard contributions for 2013, 2012, and 2011 were $5 million, $5 million, and $5 million, respectively. |
ShareBased_Compensation
Share-Based Compensation | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Share-Based Compensation | ' | ||||||||||||||||||||||||
17. Share-Based Compensation | |||||||||||||||||||||||||
On June 10, 2008, Lorillard separated from Loews, and all of the outstanding equity awards granted from the Carolina Group 2002 Stock Option Plan (the “Carolina Group Plan”) were converted on a one-for-one basis to equity awards granted from the Lorillard Inc. 2008 Incentive Compensation Plan (the “Lorillard Plan”) with the same terms and conditions. In May 2008, Lorillard’s sole shareholder and Board of Directors approved the Lorillard Plan in connection with the issuance of the Company’s Common Stock for the benefit of certain Lorillard employees. The aggregate number of shares of the Company’s Common Stock for which options, stock appreciation rights (“SARs”), restricted stock or restricted stock units may be granted under the Lorillard Plan is 11,144,475 shares, of which 2,144,475 were outstanding Carolina Group stock options converted to the Lorillard Plan; and the maximum number of shares of Lorillard Common Stock with respect to which options or SARs may be granted to any individual in any calendar year is 1,500,000 shares. | |||||||||||||||||||||||||
Stock Option Plan—Stock options are granted with an exercise price per share that may not be less than the fair value of the Company’s Common Stock on the date of the grant. Generally, options and SARs vest ratably over a four-year period and expire ten years from the date of grant. | |||||||||||||||||||||||||
A summary of the stock option and SAR transactions for the Lorillard Plan for 2013, 2012, and 2011 is as follows: | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Number of | Weighted | Number of | Weighted | Number of | Weighted | ||||||||||||||||||||
Awards | Average | Awards | Average | Awards | Average | ||||||||||||||||||||
Exercise | Exercise | Exercise | |||||||||||||||||||||||
Price | Price | Price | |||||||||||||||||||||||
Awards outstanding, January 1, | 3,434,256 | $ | 26.95 | 4,388,862 | $ | 25.94 | 4,428,339 | $ | 23.19 | ||||||||||||||||
Granted | — | — | — | — | 1,026,060 | 34.37 | |||||||||||||||||||
Exercised | (1,404,674 | ) | 24.1 | (930,156 | ) | 22.28 | (1,040,094 | ) | 22.65 | ||||||||||||||||
Forfeited | — | — | (20,631 | ) | 23.62 | (25,443 | ) | 23.72 | |||||||||||||||||
Expired | — | — | (3,819 | ) | 23.53 | — | — | ||||||||||||||||||
Awards outstanding, December 31 | 2,029,582 | 28.92 | 3,434,256 | 26.95 | 4,388,862 | 25.94 | |||||||||||||||||||
Awards exercisable, December 31 | 1,350,409 | 27.31 | 1,760,898 | 25.05 | 1,505,325 | 22.23 | |||||||||||||||||||
Shares available for grant, December 31 | 4,690,378 | 4,375,683 | 4,270,449 | ||||||||||||||||||||||
The following table summarizes information about stock options and SARs outstanding in connection with the Lorillard Plan at December 31, 2013: | |||||||||||||||||||||||||
Awards Outstanding | Awards Vested | ||||||||||||||||||||||||
Range of exercise prices | Number of | Weighted | Weighted | Number of | Weighted | ||||||||||||||||||||
Shares | Average | Average | Shares | Average | |||||||||||||||||||||
Remaining | Exercise | Exercise | |||||||||||||||||||||||
Contractual | Price | Price | |||||||||||||||||||||||
Life | |||||||||||||||||||||||||
$6.67 – 11.66 | 3,000 | 1.1 | $ | 10.84 | 3,000 | $ | 10.84 | ||||||||||||||||||
11.67 – 16.66 | 31,686 | 2.1 | 15.67 | 31,686 | 15.67 | ||||||||||||||||||||
16.67 – 21.66 | 144,285 | 4.4 | 19.87 | 144,285 | 19.87 | ||||||||||||||||||||
21.67 – 26.66 | 728,053 | 5.7 | 24.83 | 525,271 | 24.51 | ||||||||||||||||||||
26.67 – 31.66 | 419,148 | 5.4 | 27.09 | 318,960 | 27.09 | ||||||||||||||||||||
31.67 – 36.66 | 280,146 | 7.2 | 35.73 | 143,325 | 35.46 | ||||||||||||||||||||
36.67 – 38.00 | 423,264 | 7.2 | 37.45 | 183,882 | 37.45 | ||||||||||||||||||||
During the period January 1, 2010 to December 31, 2011, Lorillard awarded non-qualified stock options totaling 1,790,244 shares. During the period January 1, 2006 to December 31, 2009, Lorillard awarded SARs. In accordance with the Lorillard Plan, Lorillard has the ability to settle SARs in shares or cash and has the intention to settle in shares. The SARs balance at December 31, 2013 was 777,172 shares and the non-qualified stock options balance at December 31, 2013 was 1,252,410 shares. | |||||||||||||||||||||||||
The weighted average remaining contractual term of awards outstanding and vested as of December 31, 2013, was 5.93 years and 5.46 years, respectively. The aggregate intrinsic value of awards outstanding and vested at December 31, 2013 was $44 million and $32 million, respectively. The total intrinsic value of awards exercised during the year ended December 31, 2013 was $31 million. | |||||||||||||||||||||||||
Lorillard recorded stock-based compensation expense of $2 million, $5 million, and $5 million related to stock options and SARS issued under the Lorillard Plan during 2013, 2012, and 2011 respectively. The related income tax benefits recognized were $1 million, $1 million, and $2 million for 2013, 2012, and 2011, respectively. At December 31, 2013, the compensation cost related to nonvested awards not yet recognized was $1 million, and the weighted average period over which it is expected to be recognized is 1.07 years. | |||||||||||||||||||||||||
The fair value of granted options and SARs for the Lorillard Plan was estimated at the grant date using the Black-Scholes pricing model with the following assumptions and results: | |||||||||||||||||||||||||
Year Ended December 31, | 2011 | ||||||||||||||||||||||||
Weighted average expected dividend yield | 5.8 | % | |||||||||||||||||||||||
Weighted average expected implied volatility | 30 | % | |||||||||||||||||||||||
Weighted average risk-free interest rate | 1.5 | % | |||||||||||||||||||||||
Expected holding period (in years) | 5 | ||||||||||||||||||||||||
Weighted average fair value of awards | $ | 4.9 | |||||||||||||||||||||||
The expected dividend yield is based on the expected dividend rate and the price of the Company’s Common Stock over the most recent period. The expected volatility is based upon the implied volatility of traded call options on the Company’s Stock with remaining maturities of greater than 180 days. The risk-free interest rate is based upon the interest rate on U.S. Treasury securities with maturities that correspond with the expected life of the applicable stock options. The expected holding period is estimated based upon historical exercise data for previously awarded options, taking into consideration the vesting period and contractual lives of the applicable options. Compensation expense is net of an estimated forfeiture rate based on historical experience with similar options. | |||||||||||||||||||||||||
Restricted Stock Plan—As part of the Lorillard Plan mentioned above, restricted stock units (“RSUs”) may be granted to employees (“Employees”) annually. These RSUs enable the recipients to receive restricted shares of Lorillard’s common stock at the end of a one year performance period. The restricted shares vest at the end of two additional years and convert to unrestricted common stock at the conclusion of the vesting period. RSUs may be granted to Employees on an annual basis. The final award may equal 0-200% of a target based on pre-established Lorillard financial performance measures related to the one year performance period. Performance-based RSUs were issued for the first time on February 17, 2012. The 2012 RSU performance period ended on December 31, 2012 and the RSUs converted to restricted shares on February 17, 2013 based on achievement of the performance measures. Dividend equivalents accrue without compounding on the RSUs and are subject to the same risks of forfeiture as the RSUs. | |||||||||||||||||||||||||
RSU activity was as follows for the year ended December 31, 2013: | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Number of | Weighted | Number of | Weighted | ||||||||||||||||||||||
Restricted Stock Units | Average | Restricted Stock Units | Average | ||||||||||||||||||||||
Grant Date | Grant Date | ||||||||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||||||||
Outstanding, January 1, | 207,339 | $ | 42.36 | — | $ | — | |||||||||||||||||||
Granted | 217,216 | 41.63 | 210,891 | 42.36 | |||||||||||||||||||||
Transferred to restricted | (192,672 | ) | 42.35 | — | — | ||||||||||||||||||||
Forfeited | (12,672 | ) | 42.42 | (3,552 | ) | 42.35 | |||||||||||||||||||
Outstanding, December 31 | 219,211 | 41.64 | 207,339 | 42.36 | |||||||||||||||||||||
The total fair values of performance-based RSUs granted during 2013 and 2012 were $9 million and $9 million, respectively, which were equal to the market value of the underlying Lorillard common stock. The total market value of awards outstanding at the end of 2013 and 2012 were $11 million and $8 million, respectively. | |||||||||||||||||||||||||
As part of the Lorillard Plan mentioned above, restricted stock may be granted to Employees and/or non-employee directors (“Directors”) annually. The restricted stock is included as part of the shares available for grant shown above. The restricted stock was granted based on the per share closing price of the Company’s Common Stock on the date of the grant. | |||||||||||||||||||||||||
Lorillard may grant shares of restricted stock to Employees and/or Directors, giving them in most instances all of the rights of stockholders, except that they may not sell, assign, pledge or otherwise encumber such shares for a vesting period of three years for Employees or one year for Directors (“Restriction Period”). Such shares are subject to forfeiture if certain conditions are not met. | |||||||||||||||||||||||||
The fair value of the restricted shares and RSUs at the date of grant is amortized to expense ratably over the Restriction Period. Lorillard recorded pre-tax expense related to restricted stock for the years ended December 31, 2013, 2012, and 2011 of $16 million, $15 million, and $11 million, respectively. The tax benefits recognized related to this expense for the years ended December 31, 2013, 2012 and 2011 were $5 million, $5 million and $4 million, respectively. The unamortized expense related to restricted stock was $16 million at December 31, 2013, and the weighted average period over which it is expected to be recognized is 1.74 years. | |||||||||||||||||||||||||
Restricted stock activity was as follows for the years ended December 31, 2013, 2012 and 2011: | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Number | Weighted- | Number | Weighted- | Number | Weighted- | ||||||||||||||||||||
of Awards | Average | of Awards | Average | of Awards | Average | ||||||||||||||||||||
Grant | Grant | Grant | |||||||||||||||||||||||
Date Fair | Date Fair | Date Fair | |||||||||||||||||||||||
Value Per | Value Per | Value Per | |||||||||||||||||||||||
Share | Share | Share | |||||||||||||||||||||||
Balance at January 1, | 1,028,844 | $ | 28.33 | 1,310,619 | $ | 24.97 | 758,049 | $ | 23.76 | ||||||||||||||||
Granted | 166,125 | 41.28 | 156,450 | 40.97 | 599,526 | 26.5 | |||||||||||||||||||
Transferred from RSU | 179,280 | 42.35 | — | — | — | — | |||||||||||||||||||
Vested | (362,100 | ) | 26.25 | (396,786 | ) | 22.27 | (24,156 | ) | 24.85 | ||||||||||||||||
Forfeited | (18,837 | ) | 31.49 | (41,439 | ) | 28.01 | (22,800 | ) | 24.95 | ||||||||||||||||
Balance at December 31, | 993,312 | 33.72 | 1,028,844 | 28.33 | 1,310,619 | 24.97 | |||||||||||||||||||
Employee Stock Purchase Plan— On September 1, 2012, the Company established the Lorillard Inc. Employee Stock Purchase Plan (“ESPP”). Under the plan, certain full-time employees, who do not receive annual equity awards under the Lorillard Plan, may purchase shares of Lorillard common stock. The plan provides for two offering periods for purchases: March through August and September through February. At the end of each offering period, employees are able to purchase shares of our common stock at a price equal to 95% of the fair market value of the common stock on the last day of the offering period. The purchases are made through payroll deductions, and an aggregate of up to 1,500,000 shares of Lorillard common stock may be purchased by eligible employees pursuant to the ESPP. Purchases of common stock from the initial offering period were made on February 28, 2013. |
Share_Repurchase_Programs
Share Repurchase Programs | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Share Repurchase Programs | ' | ||||||||
18. Share Repurchase Programs | |||||||||
As of August 9, 2011, the Company completed its $1.4 billion share repurchase program. The program was announced in August 2010 and authorized the Company to repurchase in the aggregate up to $1 billion of its outstanding common stock. The Board of Directors amended this program in May 2011, authorizing an additional $400 million in repurchases for a total of $1.4 billion under this program. The Company repurchased 45.1 million shares at an average price of $31.02 per share under this program. | |||||||||
As of February 24, 2012, the Company completed its $750 million share repurchase program that was announced in August 2011, after repurchasing an additional 4.9 million shares in January and February 2012 for $188 million at an average purchase price of $38.28. The Company repurchased a total of 20.1 million shares at an average price of $37.29 per share under this program. | |||||||||
As of January 30, 2013, the Company completed its $500 million share repurchase program that was announced in August 2012 (the “2012 Program”), after repurchasing an additional 2.8 million shares in January 2013 for $109 million at an average purchase price of $39.24. The Company repurchased a total of 12.7 million shares at an average price of $39.38 per share under this program. | |||||||||
On March 12, 2013, Lorillard, Inc. announced that its Board of Directors had approved a new share repurchase program authorizing the Company to repurchase in the aggregate up to $500 million of its outstanding common stock. Purchases by the Company under this program are made from time to time at prevailing market prices in open market purchases, privately negotiated transactions and block purchases or otherwise, as determined by the Company’s management. The repurchases are funded from existing cash balances. On May 21, 2013, the Company announced that the Board of Directors amended the Company’s existing $500 million share repurchase program, authorizing the Company to repurchase an additional $500 million of its outstanding common stock (as amended, the “2013 Program”). | |||||||||
The 2013 Program does not obligate the Company to acquire any particular amount of common stock. The timing, frequency and amount of repurchase activity will depend on a variety of factors such as levels of cash generation from operations, cash requirements for investment in the Company’s business, current stock price, market conditions and other factors. The share repurchase program may be suspended, modified or discontinued at any time and has no set expiration date. | |||||||||
During the year ended December 31, 2013, the Company repurchased approximately 15.2 million shares for $686 million at an average purchase price of $45.14 per share under the 2013 Program. | |||||||||
As of December 31, 2013, total shares repurchased under share repurchase programs authorized by the Board since the separation from Loews in 2008 were as follows: | |||||||||
Program | Amount | Number of | |||||||
Authorized | Shares | ||||||||
Repurchased | |||||||||
(In millions) | (In millions) | ||||||||
July 2008 - October 2008 | $ | 400 | 17.6 | ||||||
May 2009 - July 2009 | 250 | 11 | |||||||
July 2009 - January 2010 | 750 | 29.3 | |||||||
February 2010 - May 2010 | 250 | 9.8 | |||||||
August 2010 * - August 2011 | 1,400 | 45.1 | |||||||
August 2011 - February 2012 | 750 | 20.1 | |||||||
August 2012 - January 2013 | 500 | 12.7 | |||||||
March 2013 ** - | 1,000 | 15.2 | |||||||
Total | $ | 5,300 | 160.8 | ||||||
* | As amended on May 19, 2011 | ||||||||
** | As amended on May 21, 2013 |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Accumulated Other Comprehensive Loss | ' | ||||||||||||
19. Accumulated Other Comprehensive Loss | |||||||||||||
Changes in accumulated other comprehensive loss during the period consisted of the following: | |||||||||||||
Defined Benefit | Foreign | Total | |||||||||||
Pension | Currency | ||||||||||||
Plan Items | |||||||||||||
(In millions) | |||||||||||||
Beginning balance, January 1, 2013 | $ | 241 | $ | — | $ | 241 | |||||||
Pension and post-retirement plan actuarial gains and prior service cost | (110 | ) | — | (110 | ) | ||||||||
Foreign currency translation adjustments | — | (1 | ) | (1 | ) | ||||||||
Ending balance December 31, 2013 | $ | 131 | $ | (1 | ) | $ | 130 | ||||||
Reclassifications out of accumulated other comprehensive loss during the period were as follows: | |||||||||||||
Amount | Affected Line | ||||||||||||
Reclassified from | Item in the Consolidated | ||||||||||||
Accumulated Other | Statements of Income | ||||||||||||
Comprehensive Loss | |||||||||||||
(In millions) | |||||||||||||
Amortization of defined benefit pension and post-retirement items: | |||||||||||||
Prior service costs | $ | (4 | ) | (A) | |||||||||
Actuarial loss | (20 | ) | (A) | ||||||||||
(24 | ) | Total before tax | |||||||||||
8 | Income tax benefit | ||||||||||||
Total reclassifications for the period | $ | (16 | ) | Net of tax | |||||||||
(A) | These accumulated comprehensive loss components are included in the computation of net periodic pension cost (see Note 16, “Retirement Plans,” for additional details), which is included in cost of sales and selling, general and administrative expenses. |
Quarterly_Financial_Data_Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Quarterly Financial Data (Unaudited) | ' | ||||||||||||||||
20. Quarterly Financial Data (Unaudited) | |||||||||||||||||
(In millions, except per share data) | |||||||||||||||||
2013 Quarter Ended | 31-Dec | 30-Sep | 30-Jun | 31-Mar | |||||||||||||
Net sales | $ | 1,743 | $ | 1,827 | $ | 1,804 | $ | 1,577 | |||||||||
Gross profit | 659 | 669 | 678 | 713 | |||||||||||||
Net income | 281 | 258 | 313 | 328 | |||||||||||||
Net income per share, diluted | $ | 0.76 | $ | 0.69 | $ | 0.83 | $ | 0.86 | |||||||||
Basic weighted average number of shares outstanding | 366.53 | 371.01 | 375.86 | 378.62 | |||||||||||||
Diluted weighted average number of shares outstanding | 367.19 | 371.77 | 376.61 | 379.42 | |||||||||||||
2012 Quarter Ended | 31-Dec | 30-Sep | 30-Jun | 31-Mar | |||||||||||||
Net sales | $ | 1,704 | $ | 1,661 | $ | 1,731 | $ | 1,526 | |||||||||
Gross profit | 644 | 602 | 612 | 523 | |||||||||||||
Net income | 309 | 283 | 284 | 223 | |||||||||||||
Net income per share, diluted | $ | 0.8 | $ | 0.72 | $ | 0.72 | $ | 0.57 | |||||||||
Basic weighted average number of shares outstanding | 384.87 | 390.21 | 390.53 | 391.45 | |||||||||||||
Diluted weighted average number of shares outstanding | 385.59 | 391.05 | 391.44 | 392.4 |
Segment_Information
Segment Information | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Segment Information | ' | ||||||||||||||||
21. Segment Information | |||||||||||||||||
Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing performance. Lorillard has two reportable segments, Cigarettes and Electronic Cigarettes. Lorillard identifies segments based on how our chief operating decision maker assesses performance and allocates resources, which is based on the types of products sold by each segment. Centrally incurred costs, such as the cost of Lorillard’s sales force and administrative overhead costs, are allocated to each segment based on the percentage of each segment’s budgeted net sales (excluding federal excise taxes) of Lorillard consolidated net sales (excluding federal excise taxes). | |||||||||||||||||
The Cigarettes segment consists principally of the operations of Lorillard Tobacco and related entities. Its principal products are marketed under the brand names of Newport, Kent, True, Maverick and Old Gold with substantially all of its sales in the United States of America. | |||||||||||||||||
The Electronic Cigarettes segment consists of the operations of LOEC (d/b/a blu eCigs), Cygnet (t/a SKYCIG) and related entities. LOEC is an electronic cigarette company in the United States, and markets its products under the blu eCigs brand. Lorillard acquired the blu eCigs brand and other assets used in the manufacture, distribution, development, research, marketing, advertising and sale of electronic cigarettes on April 24, 2012. Lorillard acquired certain of the assets and operations or SKYCIG, a United Kingdom based electronic cigarette business on October 1, 2013. | |||||||||||||||||
Prior to the acquisition of blu eCigs on April 24, 2012, Lorillard managed its operations on the basis of one operating and reportable segment. | |||||||||||||||||
Lorillard maintains its headquarters and manufactures all of its cigarette products at its Greensboro, North Carolina facilities. Substantially all of Lorillard’s sales and fixed assets are in the United States of America. Newport, Kent, True, Maverick, Old Gold, blu eCigs and SKYCIG are the registered trademarks of Lorillard and its subsidiaries. Lorillard sold its major cigarette trademarks outside of the United States in 1977. | |||||||||||||||||
(In millions) | Year Ended December 31, 2013 | ||||||||||||||||
Cigarettes | Electronic | Consolidating | Total | ||||||||||||||
Cigarettes | Adjustments | Lorillard | |||||||||||||||
Net sales | $ | 6,720 | $ | 230 | $ | — | $ | 6,950 | |||||||||
Cost of sales | 4,071 | 160 | — | 4,231 | |||||||||||||
Gross profit | 2,649 | 70 | — | 2,719 | |||||||||||||
Selling, general and administrative | 595 | 70 | — | 665 | |||||||||||||
Operating income | $ | 2,054 | $ | — | $ | — | $ | 2,054 | |||||||||
Depreciation and amortization | $ | 44 | $ | 6 | $ | — | $ | 50 | |||||||||
Total assets | $ | 3,316 | $ | 345 | $ | (125 | ) | $ | 3,536 | ||||||||
Capital expenditures | $ | 61 | $ | 1 | — | $ | 62 | ||||||||||
(In millions) | Year Ended December 31, 2012 | ||||||||||||||||
Cigarettes | Electronic | Consolidating | Total | ||||||||||||||
Cigarettes | Adjustments | Lorillard | |||||||||||||||
Net sales | $ | 6,562 | $ | 61 | $ | — | $ | 6,623 | |||||||||
Cost of sales | 4,201 | 40 | — | 4,241 | |||||||||||||
Gross profit | 2,361 | 21 | — | 2,382 | |||||||||||||
Selling, general and administrative | 484 | 20 | — | 504 | |||||||||||||
Operating income | $ | 1,877 | $ | 1 | $ | — | $ | 1,878 | |||||||||
Depreciation and amortization | $ | 38 | $ | 1 | $ | — | $ | 39 | |||||||||
Total assets | $ | 3,313 | $ | 208 | $ | (125 | ) | $ | 3,396 | ||||||||
Capital expenditures | $ | 74 | — | — | $ | 74 |
Consolidating_Financial_Inform
Consolidating Financial Information | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Consolidating Financial Information | ' | ||||||||||||||||||||
22. Consolidating Financial Information | |||||||||||||||||||||
In June 2009, April 2010, August 2011, August 2012 and May 2013, Lorillard Tobacco, as primary obligor, issued the Notes, which are unconditionally guaranteed in full by the Company for the payment and performance of Lorillard Tobacco’s obligation in connection therewith (see Note 12 for a description of the Notes). | |||||||||||||||||||||
The following sets forth the condensed consolidating balance sheets as of December 31, 2013 and 2012, condensed consolidating statements of income for the years ended December 31, 2013, 2012 and 2011, condensed consolidating statements of comprehensive income for the years ended December 31, 2013, 2012 and 2011 and condensed consolidating statements of cash flows for the years ended December 31, 2013, 2012 and 2011 for the Company as parent guarantor (herein referred to as “Parent”), Lorillard Tobacco (herein referred to as “Issuer”) and all non-guarantor subsidiaries of the Company and Lorillard Tobacco. These condensed consolidating financial statements were prepared in accordance with Rule 3-10 of SEC Regulation S-X, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.” Lorillard accounts for investments in these subsidiaries under the equity method of accounting. | |||||||||||||||||||||
Condensed Consolidating Balance Sheets | |||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Parent | Issuer | Non- | Total | Consolidated | |||||||||||||||||
guarantor | Consolidating | ||||||||||||||||||||
Subsidiaries | Adjustments | ||||||||||||||||||||
Assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 341 | $ | 1,002 | $ | 111 | $ | — | $ | 1,454 | |||||||||||
Short term investments—available for sale securities | — | 157 | — | — | 157 | ||||||||||||||||
Accounts receivable, less allowances of $3 | — | 8 | 11 | — | 19 | ||||||||||||||||
Other receivables (1) | — | 24 | 93 | (88 | ) | 29 | |||||||||||||||
Inventories | — | 412 | 87 | — | 499 | ||||||||||||||||
Deferred income taxes | — | 549 | 6 | — | 555 | ||||||||||||||||
Other current assets | — | 19 | 4 | — | 23 | ||||||||||||||||
Total current assets | 341 | 2,171 | 312 | (88 | ) | 2,736 | |||||||||||||||
Investment in subsidiaries | — | 148 | — | (148 | ) | — | |||||||||||||||
Plant and equipment, net | — | 315 | 1 | — | 316 | ||||||||||||||||
Long term investments—available for sale securities | — | 93 | — | — | 93 | ||||||||||||||||
Goodwill | — | — | 102 | — | 102 | ||||||||||||||||
Intangible assets | — | — | 87 | — | 87 | ||||||||||||||||
Deferred income taxes | — | 48 | 3 | — | 51 | ||||||||||||||||
Other assets | 125 | 151 | — | (125 | ) | 151 | |||||||||||||||
Total assets | $ | 466 | $ | 2,926 | $ | 505 | $ | (361 | ) | $ | 3,536 | ||||||||||
Liabilities and Shareholders’ Equity (Deficit): | |||||||||||||||||||||
Accounts and drafts payable | $ | — | $ | 37 | $ | 5 | $ | — | $ | 42 | |||||||||||
Accrued liabilities (1) | 13 | 434 | 14 | (84 | ) | 377 | |||||||||||||||
Settlement costs | — | 1,224 | — | — | 1,224 | ||||||||||||||||
Income taxes | 1 | 11 | — | (4 | ) | 8 | |||||||||||||||
Total current liabilities | 14 | 1,706 | 19 | (88 | ) | 1,651 | |||||||||||||||
Long-term debt | — | 3,560 | — | — | 3,560 | ||||||||||||||||
Investment in subsidiaries | 2,516 | — | — | (2,516 | ) | — | |||||||||||||||
Postretirement pension, medical and life insurance benefits | — | 305 | — | — | 305 | ||||||||||||||||
Other liabilities | — | 44 | 165 | (125 | ) | 84 | |||||||||||||||
Total liabilities | 2,530 | 5,615 | 184 | (2,729 | ) | 5,600 | |||||||||||||||
Shareholders’ Equity (Deficit): | |||||||||||||||||||||
Common stock | 4 | — | — | — | 4 | ||||||||||||||||
Additional paid-in capital | 256 | 130 | 177 | (307 | ) | 256 | |||||||||||||||
Retained earnings/accumulated (deficit) | (1,438 | ) | (2,688 | ) | 143 | 2,545 | (1,438 | ) | |||||||||||||
Accumulated other comprehensive income (loss) | (130 | ) | (131 | ) | 1 | 130 | (130 | ) | |||||||||||||
Treasury stock | (756 | ) | — | — | — | (756 | ) | ||||||||||||||
Total shareholders’ equity (deficit) | (2,064 | ) | (2,689 | ) | 321 | 2,368 | (2,064 | ) | |||||||||||||
Total liabilities and shareholders’ equity (deficit) | $ | 466 | $ | 2,926 | $ | 505 | $ | (361 | ) | $ | 3,536 | ||||||||||
-1 | Includes intercompany royalties between Issuer and non-guarantor subsidiaries of a corresponding amount. | ||||||||||||||||||||
Condensed Consolidating Balance Sheets | |||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Parent | Issuer | Non- | Total | Consolidated | |||||||||||||||||
guarantor | Consolidating | ||||||||||||||||||||
Subsidiaries | Adjustments | ||||||||||||||||||||
Assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 150 | $ | 1,471 | $ | 99 | $ | — | $ | 1,720 | |||||||||||
Accounts receivable, less allowances of $3 | — | 8 | 10 | — | 18 | ||||||||||||||||
Other receivables (1) | 1 | 41 | 77 | (67 | ) | 52 | |||||||||||||||
Inventories | — | 369 | 41 | — | 410 | ||||||||||||||||
Deferred income taxes | — | 555 | 2 | — | 557 | ||||||||||||||||
Other current assets | — | 12 | 8 | — | 20 | ||||||||||||||||
Total current assets | 151 | 2,456 | 237 | (67 | ) | 2,777 | |||||||||||||||
Investment in subsidiaries | — | 118 | — | (118 | ) | — | |||||||||||||||
Plant and equipment, net | — | 298 | — | — | 298 | ||||||||||||||||
Goodwill | — | — | 64 | — | 64 | ||||||||||||||||
Intangible assets | — | — | 57 | — | 57 | ||||||||||||||||
Deferred income taxes | — | 45 | 5 | (2 | ) | 48 | |||||||||||||||
Other assets | 125 | 152 | — | (125 | ) | 152 | |||||||||||||||
Total assets | $ | 276 | $ | 3,069 | $ | 363 | $ | (312 | ) | $ | 3,396 | ||||||||||
Liabilities and Shareholders’ Equity (Deficit): | |||||||||||||||||||||
Accounts and drafts payable | $ | — | $ | 35 | $ | 4 | $ | — | $ | 39 | |||||||||||
Accrued liabilities (1) | 14 | 399 | 10 | (67 | ) | 356 | |||||||||||||||
Settlement costs | — | 1,183 | — | — | 1,183 | ||||||||||||||||
Income taxes | — | — | 23 | — | 23 | ||||||||||||||||
Total current liabilities | 14 | 1,617 | 37 | (67 | ) | 1,601 | |||||||||||||||
Long-term debt | — | 3,111 | — | — | 3,111 | ||||||||||||||||
Investment in subsidiaries | 2,037 | — | — | (2,037 | ) | — | |||||||||||||||
Postretirement pension, medical and life insurance benefits | — | 409 | — | — | 409 | ||||||||||||||||
Other liabilities | 2 | 39 | 138 | (127 | ) | 52 | |||||||||||||||
Total liabilities | 2,053 | 5,176 | 175 | (2,231 | ) | 5,173 | |||||||||||||||
Shareholders’ Equity (Deficit): | |||||||||||||||||||||
Common stock | 5 | — | — | — | 5 | ||||||||||||||||
Additional paid-in capital | 298 | 92 | 72 | (164 | ) | 298 | |||||||||||||||
Retained earnings/accumulated (deficit) | 2,351 | (1,958 | ) | 116 | 1,842 | 2,351 | |||||||||||||||
Accumulated other comprehensive income (loss) | (241 | ) | (241 | ) | — | 241 | (241 | ) | |||||||||||||
Treasury stock | (4,190 | ) | — | — | — | (4,190 | ) | ||||||||||||||
Total shareholders’ equity (deficit) | (1,777 | ) | (2,107 | ) | 188 | 1,919 | (1,777 | ) | |||||||||||||
Total liabilities and shareholders’ equity (deficit) | $ | 276 | $ | 3,069 | $ | 363 | $ | (312 | ) | $ | 3,396 | ||||||||||
-1 | Includes intercompany royalties between Issuer and non-guarantor subsidiaries of a corresponding amount. | ||||||||||||||||||||
Condensed Consolidating Statements of Income | |||||||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Parent | Issuer | Non- | Total | Consolidated | |||||||||||||||||
guarantor | Consolidating | ||||||||||||||||||||
Subsidiaries | Adjustments | ||||||||||||||||||||
Net sales (including excise taxes of $1,978) | $ | — | $ | 6,720 | $ | 1,333 | $ | (1,103 | ) | $ | 6,950 | ||||||||||
Cost of sales (including excise taxes of $1,978) | — | 4,071 | 160 | — | 4,231 | ||||||||||||||||
Gross profit | — | 2,649 | 1,173 | (1,103 | ) | 2,719 | |||||||||||||||
Selling, general and administrative (1) | 2 | 1,692 | 74 | (1,103 | ) | 665 | |||||||||||||||
Operating income | (2 | ) | 957 | 1,099 | — | 2,054 | |||||||||||||||
Investment income | 6 | 2 | — | (6 | ) | 2 | |||||||||||||||
Interest expense | — | (172 | ) | (6 | ) | 6 | (172 | ) | |||||||||||||
Income before taxes | 4 | 787 | 1,093 | — | 1,884 | ||||||||||||||||
Income taxes | 4 | 295 | 405 | — | 704 | ||||||||||||||||
Equity in earnings of subsidiaries | 1,180 | 690 | — | (1,870 | ) | — | |||||||||||||||
Net income | $ | 1,180 | $ | 1,182 | $ | 688 | $ | (1,870 | ) | $ | 1,180 | ||||||||||
-1 | Includes intercompany royalties between Issuer and non-guarantor subsidiaries of a corresponding amount. | ||||||||||||||||||||
Condensed Consolidating Statements of Income | |||||||||||||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Parent | Issuer | Non- | Total | Consolidated | |||||||||||||||||
guarantor | Consolidating | ||||||||||||||||||||
Subsidiaries | Adjustments | ||||||||||||||||||||
Net sales (including excise taxes of $1,987) | $ | — | $ | 6,562 | $ | 1,118 | $ | (1,057 | ) | $ | 6,623 | ||||||||||
Cost of sales (including excise taxes of $1,987) | — | 4,201 | 40 | — | 4,241 | ||||||||||||||||
Gross profit | — | 2,361 | 1,078 | (1,057 | ) | 2,382 | |||||||||||||||
Selling, general and administrative (1) | 1 | 1,536 | 24 | (1,057 | ) | 504 | |||||||||||||||
Operating income | (1 | ) | 825 | 1,054 | — | 1,878 | |||||||||||||||
Investment income | — | 3 | 1 | — | 4 | ||||||||||||||||
Interest expense | (1 | ) | (151 | ) | (2 | ) | — | (154 | ) | ||||||||||||
Income before taxes | (2 | ) | 677 | 1,053 | — | 1,728 | |||||||||||||||
Income taxes | (1 | ) | 238 | 392 | — | 629 | |||||||||||||||
Equity in earnings of subsidiaries | 1,100 | 661 | — | (1,761 | ) | — | |||||||||||||||
Net income | $ | 1,099 | $ | 1,100 | $ | 661 | $ | (1,761 | ) | $ | 1,099 | ||||||||||
-1 | Includes intercompany royalties between Issuer and non-guarantor subsidiaries of a corresponding amount. | ||||||||||||||||||||
Condensed Consolidating Statements of Income | |||||||||||||||||||||
For the Year Ended December 31, 2011 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Parent | Issuer | Non- | Total | Consolidated | |||||||||||||||||
guarantor | Consolidating | ||||||||||||||||||||
Subsidiaries | Adjustments | ||||||||||||||||||||
Net sales (including excise taxes of $2,014) | $ | — | $ | 6,466 | $ | — | $ | — | $ | 6,466 | |||||||||||
Cost of sales (including excise taxes of $2,014) | — | 4,123 | — | — | 4,123 | ||||||||||||||||
Gross profit | — | 2,343 | — | — | 2,343 | ||||||||||||||||
Selling, general and administrative (1) | — | 1,473 | (1,022 | ) | — | 451 | |||||||||||||||
Operating income | — | 870 | 1,022 | — | 1,892 | ||||||||||||||||
Investment income | 1 | 1 | 1 | — | 3 | ||||||||||||||||
Interest expense | — | (125 | ) | — | — | (125 | ) | ||||||||||||||
Income before taxes | 1 | 746 | 1,023 | — | 1,770 | ||||||||||||||||
Income taxes | — | 290 | 364 | — | 654 | ||||||||||||||||
Equity in earnings of subsidiaries | 1,115 | 659 | — | (1,774 | ) | — | |||||||||||||||
Net income | $ | 1,116 | $ | 1,115 | $ | 659 | $ | (1,774 | ) | $ | 1,116 | ||||||||||
-1 | Includes intercompany royalties between Issuer and non-guarantor subsidiaries of a corresponding amount. | ||||||||||||||||||||
Condensed Consolidating Statements of Comprehensive Income | |||||||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Parent | Issuer | Non- | Total | Consolidated | |||||||||||||||||
guarantor | Consolidating | ||||||||||||||||||||
Subsidiaries | Adjustments | ||||||||||||||||||||
Net income | $ | 1,180 | $ | 1,182 | $ | 688 | $ | (1,870 | ) | $ | 1,180 | ||||||||||
Other comprehensive income, net of tax: | |||||||||||||||||||||
Defined benefit retirement plans gain, net of tax expense of $41 | 110 | 110 | — | (110 | ) | 110 | |||||||||||||||
Foreign currency translation adjustments, net of tax benefit of $– | 1 | — | 1 | (1 | ) | 1 | |||||||||||||||
Other comprehensive income | 111 | 110 | 1 | (111 | ) | 111 | |||||||||||||||
Comprehensive income | $ | 1,291 | $ | 1,292 | $ | 689 | $ | (1,981 | ) | $ | 1,291 | ||||||||||
Condensed Consolidating Statements of Comprehensive Income | |||||||||||||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Parent | Issuer | Non- | Total | Consolidated | |||||||||||||||||
guarantor | Consolidating | ||||||||||||||||||||
Subsidiaries | Adjustments | ||||||||||||||||||||
Net income | $ | 1,099 | $ | 1,100 | $ | 661 | $ | (1,761 | ) | $ | 1,099 | ||||||||||
Other comprehensive loss, net of tax: | |||||||||||||||||||||
Defined benefit retirement plans loss, net of tax benefit of $(4) | — | (13 | ) | — | — | (13 | ) | ||||||||||||||
Other comprehensive loss | — | (13 | ) | — | — | (13 | ) | ||||||||||||||
Comprehensive income | $ | 1,099 | $ | 1,087 | $ | 661 | $ | (1,761 | ) | $ | 1,086 | ||||||||||
Condensed Consolidating Statements of Comprehensive Income | |||||||||||||||||||||
For the Year Ended December 31, 2011 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Parent | Issuer | Non- | Total | Consolidated | |||||||||||||||||
guarantor | Consolidating | ||||||||||||||||||||
Subsidiaries | Adjustments | ||||||||||||||||||||
Net income | $ | 1,116 | $ | 1,115 | $ | 659 | $ | (1,774 | ) | $ | 1,116 | ||||||||||
Other comprehensive loss, net of tax: | |||||||||||||||||||||
Defined benefit retirement plans loss, net of tax benefit of $(64) | — | (119 | ) | — | — | (119 | ) | ||||||||||||||
Other comprehensive loss | — | (119 | ) | — | — | (119 | ) | ||||||||||||||
Comprehensive income | $ | 1,116 | $ | 996 | $ | 659 | $ | (1,774 | ) | $ | 997 | ||||||||||
Condensed Consolidating Statements of Cash Flows | |||||||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Parent | Issuer | Non- | Total | Consolidated | |||||||||||||||||
guarantor | Consolidating | ||||||||||||||||||||
Subsidiaries | Adjustments | ||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||
Net income | $ | 1,180 | $ | 1,182 | $ | 688 | $ | (1,870 | ) | $ | 1,180 | ||||||||||
Adjustments to reconcile to net cash provided by operating activities: | |||||||||||||||||||||
Equity income from subsidiaries | (1,180 | ) | (690 | ) | — | 1,870 | — | ||||||||||||||
Depreciation and amortization | — | 44 | 6 | — | 50 | ||||||||||||||||
Pension, health and life insurance contributions | — | (44 | ) | — | — | (44 | ) | ||||||||||||||
Pension, health and life insurance benefits expense | — | 36 | — | — | 36 | ||||||||||||||||
Deferred income taxes | (1 | ) | (39 | ) | (2 | ) | — | (42 | ) | ||||||||||||
Share-based compensation | 1 | 17 | — | — | 18 | ||||||||||||||||
Excess tax benefits from share-based arrangements | — | (13 | ) | — | — | (13 | ) | ||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||||||
Accounts and other receivables | — | (8 | ) | (16 | ) | 17 | (7 | ) | |||||||||||||
Inventories | — | (43 | ) | (46 | ) | — | (89 | ) | |||||||||||||
Accounts payable and accrued liabilities | (1 | ) | 37 | 1 | (17 | ) | 20 | ||||||||||||||
Settlement costs | — | 41 | — | — | 41 | ||||||||||||||||
Income taxes | 2 | 54 | (20 | ) | 36 | ||||||||||||||||
Other current assets | — | (1 | ) | 4 | — | 3 | |||||||||||||||
Other assets | — | 3 | — | — | 3 | ||||||||||||||||
Return on investment in subsidiaries | 1,913 | 661 | — | (2,574 | ) | — | |||||||||||||||
Net cash provided by (used in) operating activities | 1,914 | 1,237 | 615 | (2,574 | ) | 1,192 | |||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||
Purchases of investments | — | (276 | ) | — | — | (276 | ) | ||||||||||||||
Business acquisition | — | — | (46 | ) | — | (46 | ) | ||||||||||||||
Additions to plant and equipment | — | (61 | ) | (1 | ) | — | (62 | ) | |||||||||||||
Sales, maturities and calls of investments | — | 26 | — | — | 26 | ||||||||||||||||
Investment in subsidiary | (105 | ) | — | — | 105 | — | |||||||||||||||
Net cash provided by (used in) investing activities | (105 | ) | (311 | ) | (47 | ) | 105 | (358 | ) | ||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||
Proceeds from issuance of long-term debt | — | 500 | — | — | 500 | ||||||||||||||||
Dividends paid | (823 | ) | (1,913 | ) | (661 | ) | 2,574 | (823 | ) | ||||||||||||
Shares repurchased | (795 | ) | — | — | — | (795 | ) | ||||||||||||||
Debt issuance costs | — | (4 | ) | — | — | (4 | ) | ||||||||||||||
Contributions from parent | — | — | 105 | (105 | ) | — | |||||||||||||||
Proceeds from exercise of stock options | — | 9 | — | — | 9 | ||||||||||||||||
Excess tax benefits from share-based arrangements | — | 13 | — | — | 13 | ||||||||||||||||
Net cash provided by (used in) financing activities | (1,618 | ) | (1,395 | ) | (556 | ) | 2,469 | (1,100 | ) | ||||||||||||
Effect of foreign currency rate changes on cash and cash equivalents | — | — | — | — | — | ||||||||||||||||
Change in cash and cash equivalents | 191 | (469 | ) | 12 | — | (266 | ) | ||||||||||||||
Cash and cash equivalents, beginning of year | 150 | 1,471 | 99 | — | 1,720 | ||||||||||||||||
Cash and cash equivalents, end of year | $ | 341 | $ | 1,002 | $ | 111 | $ | — | $ | 1,454 | |||||||||||
Condensed Consolidating Statements of Cash Flows | |||||||||||||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Parent | Issuer | Non- | Total | Consolidated | |||||||||||||||||
guarantor | Consolidating | ||||||||||||||||||||
Subsidiaries | Adjustments | ||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||
Net income | $ | 1,099 | $ | 1,100 | $ | 661 | $ | (1,761 | ) | $ | 1,099 | ||||||||||
Adjustments to reconcile to net cash provided by operating activities: | |||||||||||||||||||||
Equity income from subsidiaries | (1,100 | ) | (661 | ) | — | 1,761 | — | ||||||||||||||
Depreciation and amortization | — | 38 | 1 | — | 39 | ||||||||||||||||
Pension, health and life insurance contributions | — | (43 | ) | — | — | (43 | ) | ||||||||||||||
Pension, health and life insurance benefits expense | — | 44 | — | — | 44 | ||||||||||||||||
Deferred income taxes | 1 | (10 | ) | (2 | ) | — | (11 | ) | |||||||||||||
Share-based compensation | 1 | 19 | — | — | 20 | ||||||||||||||||
Excess tax benefits from share-based arrangements | — | (11 | ) | — | — | (11 | ) | ||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||||||
Accounts and other receivables | — | 877 | (10 | ) | (875 | ) | (8 | ) | |||||||||||||
Inventories | — | (92 | ) | (26 | ) | — | (118 | ) | |||||||||||||
Accounts payable and accrued liabilities | — | 50 | (861 | ) | 875 | 64 | |||||||||||||||
Settlement costs | — | 32 | — | — | 32 | ||||||||||||||||
Income taxes | (1 | ) | 43 | 17 | 59 | ||||||||||||||||
Other current assets | — | 13 | (8 | ) | — | 5 | |||||||||||||||
Other assets | — | (1 | ) | — | — | (1 | ) | ||||||||||||||
Return on investment in subsidiaries | 1,495 | 550 | — | (2,045 | ) | — | |||||||||||||||
Net cash provided by (used in) operating activities | 1,495 | 1,948 | (228 | ) | (2,045 | ) | 1,170 | ||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||
Business acquisition, net of cash acquired (1) | (125 | ) | — | (135 | ) | 125 | (135 | ) | |||||||||||||
Additions to plant and equipment | — | (74 | ) | — | — | (74 | ) | ||||||||||||||
Investment in subsidiary | (70 | ) | — | — | 70 | — | |||||||||||||||
Net cash provided by (used in) investing activities | (195 | ) | (74 | ) | (135 | ) | 195 | (209 | ) | ||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||
Shares repurchased | (578 | ) | — | — | — | (578 | ) | ||||||||||||||
Proceeds from issuance of long-term debt | — | 500 | 125 | (125 | ) | 500 | |||||||||||||||
Dividends paid | (807 | ) | (1,495 | ) | (550 | ) | 2,045 | (807 | ) | ||||||||||||
Debt issuance costs | — | (5 | ) | — | — | (5 | ) | ||||||||||||||
Contributions from parent | — | — | 70 | (70 | ) | — | |||||||||||||||
Proceeds from exercise of stock options | — | 5 | — | — | 5 | ||||||||||||||||
Excess tax benefits from share-based arrangements | — | 10 | — | — | 10 | ||||||||||||||||
Net cash provided by (used in) financing activities | (1,385 | ) | (985 | ) | (355 | ) | 1,850 | (875 | ) | ||||||||||||
Change in cash and cash equivalents | (85 | ) | 889 | (718 | ) | — | 86 | ||||||||||||||
Cash and cash equivalents, beginning of year | 235 | 582 | 817 | — | 1,634 | ||||||||||||||||
Cash and cash equivalents, end of year | $ | 150 | $ | 1,471 | $ | 99 | $ | — | $ | 1,720 | |||||||||||
-1 | $125 million reflected as cash flows used by Parent consists of a loan from Parent to a Non-guarantor Subsidiary. | ||||||||||||||||||||
Condensed Consolidating Statements of Cash Flows | |||||||||||||||||||||
For the Year Ended December 31, 2011 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Parent | Issuer | Non- | Total | Consolidated | |||||||||||||||||
guarantor | Consolidating | ||||||||||||||||||||
Subsidiaries | Adjustments | ||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||
Net income | $ | 1,116 | $ | 1,115 | $ | 659 | $ | (1,774 | ) | $ | 1,116 | ||||||||||
Adjustments to reconcile to net cash provided by operating activities: | |||||||||||||||||||||
Equity income from subsidiaries | (1,115 | ) | (659 | ) | — | 1,774 | — | ||||||||||||||
Depreciation and amortization | — | 37 | — | — | 37 | ||||||||||||||||
Pension, health and life insurance contributions | — | (42 | ) | — | — | (42 | ) | ||||||||||||||
Pension, health and life insurance benefits expense | — | 28 | — | — | 28 | ||||||||||||||||
Deferred income taxes | — | (16 | ) | 1 | — | (15 | ) | ||||||||||||||
Share-based compensation | — | 16 | — | — | 16 | ||||||||||||||||
Excess tax benefits from share-based arrangements | — | (4 | ) | — | — | (4 | ) | ||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||||||
Accounts and other receivables | (1 | ) | (873 | ) | (2 | ) | 877 | 1 | |||||||||||||
Accounts payable and accrued liabilities | 12 | (37 | ) | 869 | (877 | ) | (33 | ) | |||||||||||||
Settlement costs | — | 91 | — | — | 91 | ||||||||||||||||
Income taxes | — | (2 | ) | (4 | ) | (6 | ) | ||||||||||||||
Other current assets | — | (10 | ) | — | — | (10 | ) | ||||||||||||||
Other assets | — | (170 | ) | (213 | ) | 387 | 4 | ||||||||||||||
Return on investment in subsidiaries | 1,730 | 1,212 | — | (2,942 | ) | — | |||||||||||||||
Net cash provided by (used in) operating activities | 1,742 | 686 | 1,310 | (2,555 | ) | 1,183 | |||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||
Additions to plant and equipment | — | (56 | ) | — | — | (56 | ) | ||||||||||||||
Return of capital | 252 | — | — | (252 | ) | — | |||||||||||||||
Net cash provided by (used in) investing activities | 252 | (56 | ) | — | (252 | ) | (56 | ) | |||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||
Shares repurchased | (1,586 | ) | — | — | — | (1,586 | ) | ||||||||||||||
Proceeds from issuance of long-term debt | 387 | 750 | — | (387 | ) | 750 | |||||||||||||||
Dividends paid | (723 | ) | (1,982 | ) | (1,212 | ) | 3,194 | (723 | ) | ||||||||||||
Debt issuance costs | — | (9 | ) | — | — | (9 | ) | ||||||||||||||
Proceeds from exercise of stock options | — | 8 | — | — | 8 | ||||||||||||||||
Excess tax benefits from share-based arrangements | — | 4 | — | — | 4 | ||||||||||||||||
Net cash provided by (used in) financing activities | (1,922 | ) | (1,229 | ) | (1,212 | ) | 2,807 | (1,556 | ) | ||||||||||||
Change in cash and cash equivalents | 72 | (599 | ) | 98 | — | (429 | ) | ||||||||||||||
Cash and cash equivalents, beginning of year | 163 | 1,181 | 719 | — | 2,063 | ||||||||||||||||
Cash and cash equivalents, end of year | $ | 235 | $ | 582 | $ | 817 | $ | — | $ | 1,634 |
Legal_Proceedings
Legal Proceedings | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Legal Proceedings | ' | ||||
23. Legal Proceedings | |||||
Overview | |||||
As of February 14, 2014, 7,753 product liability cases are pending against cigarette manufacturers in the United States. Lorillard Tobacco is a defendant in 6,832 of these cases. Lorillard, Inc. is a co-defendant in 655 pending cases. A total of 4,197 of these lawsuits are Engle Progeny Cases, described below. In addition to the product liability cases, Lorillard Tobacco and, in some instances, Lorillard, Inc., are defendants in Filter Cases and Tobacco-Related Antitrust Cases. | |||||
Pending cases against Lorillard are those in which Lorillard Tobacco or Lorillard, Inc. have been joined to the litigation by either receipt of service of process, or execution of a waiver thereof, and a dismissal order has not been entered with respect to Lorillard Tobacco or Lorillard, Inc. Certain Flight Attendant Cases that were dismissed for administrative reasons, but which may be reinstated pursuant to the settlement agreement in Broin v. Philip Morris Companies, Inc., et al. have been included in the count of pending cases. The table below lists the number of certain tobacco-related cases pending against Lorillard as of the dates listed. A description of each type of case follows the table. | |||||
Type of Case | Total Number of Cases | ||||
Pending against Lorillard as | |||||
of February 14, 2014 | |||||
Conventional Product Liability Cases | 23 | ||||
Engle Progeny Cases | 4,197 | ||||
West Virginia Individual Personal Injury Cases | 38 | ||||
Flight Attendant Cases | 2,572 | ||||
Class Action Cases | 1 | ||||
Reimbursement Cases | 1 | ||||
Filter Cases | 62 | ||||
Tobacco-Related Antitrust Cases | 1 | ||||
Conventional product Liability Cases. Conventional Product Liability Cases are brought by individuals who allege cancer or other healtheffects caused by smoking cigarettes, by using smokeless tobacoo products, by addiction to tobacco, or by exposure to environmental tobacco smoke.Lorillard Tobacco is a defendant in each of the Conventional Product Liability cases listed in the above, and Loillard, Inc. is a co-defendant in four of the Conventional Product Liability Cases. | |||||
Engle Progeny Cases. Engle Progeny Cases are brought by individuals who purport to be members of the decertified Engle class. These cases are pending in a number of Florida courts. Lorillard Tobacco is a defendant in each of the Engle Progeny Cases listed in the above table and Lorillard, Inc. is a co-defendant in 651 Engle Progeny Cases. The time period for filing Engle Progeny Cases expired in January 2008 and no additional cases may be filed. Some of the Engle Progeny Cases were filed on behalf of multiple class members. Some of the courts hearing the cases filed by multiple class members have severed these suits into separate individual cases. It is possible the remaining suits filed by multiple class members may also be severed into separate individual cases. | |||||
West Virginia Individual Personal Injury Cases. In a 1999 administrative order, the West Virginia Supreme Court of Appeals transferred to a single West Virginia court a group of cases brought by individuals who allege cancer or other health effects caused by smoking cigarettes, smoking cigars, or using smokeless tobacco products (the “West Virginia Individual Personal Injury Cases”). The plaintiffs’ claims alleging injury from smoking cigarettes have been consolidated for trial. The plaintiffs’ claims alleging injury from the use of other tobacco products have been severed from the consolidated cigarette claims and have not been consolidated for trial. Lorillard Tobacco is a defendant in each of the West Virginia Individual Personal Injury Cases listed in the above table. Lorillard, Inc. is not a defendant in any of the West Virginia Individual Personal Injury Cases. The time for filing a case that could be consolidated for trial with the West Virginia Individual Personal Injury Cases expired in 2000. | |||||
Flight Attendant Cases. Flight Attendant Cases are brought by non-smoking flight attendants alleging injury from exposure to environmental smoke in the cabins of aircraft. Plaintiffs in these cases may not seek punitive damages for injuries that arose prior to January 15, 1997. Lorillard Tobacco is a defendant in each of the Flight Attendant Cases listed in the above table. Lorillard, Inc. is not a defendant in any of the Flight Attendant Cases. The time for filing Flight Attendant Cases expired in 2000 and no additional cases in this category may be filed. | |||||
Class Action Cases. Class Action Cases are purported to be brought on behalf of large numbers of individuals for damages allegedly caused by smoking. Lorillard Tobacco but not Lorillard, Inc. is a defendant in the Class Action Case listed in the above table. Neither Lorillard Tobacco nor Lorillard, Inc. is a defendant in additional Class Action Cases that are pending against other cigarette manufacturers, including approximately 19 “lights” Class Action Cases and two Class Action Cases that seek court- supervised medical monitoring programs. | |||||
Reimbursement Cases. Reimbursement Cases are brought by or on behalf of entities seeking equitable relief and reimbursement of expenses incurred in providing health care to individuals who allegedly were injured by smoking. Plaintiffs in these cases have included the U.S. federal government, U.S. state and local governments, foreign governmental entities, hospitals or hospital districts, American Indian tribes, labor unions, private companies and private citizens. Included in this category is the suit filed by the federal government, United States of America v. Philip Morris USA, Inc., et al., (“Philip Morris”), that sought to recover profits earned by the defendants and other equitable relief. Lorillard Tobacco is a defendant in the case, and Lorillard, Inc. is not a party to this case. In August 2006, the trial court issued its final judgment and remedial order and granted injunctive and other equitable relief. The final judgment did not award monetary damages. In May 2009, the final judgment was largely affirmed by an appellate court. In June 2010, the U.S. Supreme Court denied review of the case. See “Reimbursement Cases” below. | |||||
Filter Cases. Filter Cases are brought by individuals, including former employees of a predecessor of Lorillard Tobacco, who seek damages resulting from their alleged exposure to asbestos fibers that were incorporated into filter material used in one brand of cigarettes manufactured by Lorillard for a limited period of time ending more than 50 years ago. Lorillard Tobacco is a defendant in 61 of the 62 Filter Cases listed in the above table. Lorillard, Inc. is a co-defendant in one of the 61 Filter Cases that are pending against Lorillard Tobacco. Lorillard, Inc. is also a defendant in one additional Filter Case in which Lorillard Tobacco is not a defendant. | |||||
Tobacco-Related Antitrust Cases. In 2000 and 2001, a number of cases were brought against cigarette manufacturers, including Lorillard Tobacco, alleging that defendants conspired to set the price of cigarettes in violation of federal and state antitrust and unfair business practices statutes. Plaintiffs sought class certification on behalf of persons who purchased cigarettes directly or indirectly from one or more of the defendant cigarette manufacturers. Lorillard Tobacco is a defendant in one Tobacco-Related Antitrust Case as set forth in the table above. Lorillard, Inc. is not a defendant in this case. All of the other cases have been either successfully defended or voluntarily dismissed. | |||||
Loss Accrual and Disclosure Policy | |||||
Lorillard establishes accruals in accordance with Accounting Standards Codification Topic 450, Contingencies (“ASC 450”), when a material litigation liability is both probable and can be reasonably estimated. There are a number of factors impacting Lorillard’s ability to estimate the possible loss or a range of loss, including the specific facts of each matter; the legal theories proffered by plaintiffs and legal defenses available to Lorillard Tobacco and Lorillard, Inc.; the wide-ranging outcomes reached in similar cases; differing procedural and substantive laws in the various jurisdictions in which lawsuits have been filed, including whether punitive damages may be pursued or are permissible; the degree of specificity in a plaintiff’s complaint; the history of the case and whether discovery has been completed; plaintiffs’ history of use of Lorillard Tobacco’s cigarettes relative to those of the other defendants; the attribution of damages, if any, among multiple defendants; the application of contributory and/or comparative negligence to the allocation of damage awards among plaintiffs and defendants; the likelihood of settlements for de minimis amounts prior to trial; the likelihood of success at trial; the likelihood of success on appeal; and the impact of current and pending state and federal appellate decisions. It has been Lorillard’s experience and is its continued expectation that the above complexities and uncertainties will not be clarified until the late stages of litigation. For those reasonably possible loss contingencies for which an estimate of the possible loss or range of loss cannot be made, Lorillard discloses the nature of the litigation and any developments as appropriate. | |||||
Lorillard monitors the status of all outstanding litigation on an ongoing basis in order to determine the probability of loss and assess whether an estimate of the possible loss or range of loss can be determined. In evaluating litigation, Lorillard considers, among other things, the nature of the claims; the jurisdiction in which the claims have been filed and the law and case law developed in that jurisdiction; the experience of plaintiffs’ counsel in this type of litigation; the parties’ respective litigation strategies; the stage of the proceedings; the outcome of the matters at trial or on appeal; the type and amount of damages claimed by plaintiffs; the outcomes and damage awards, if any, for similar matters brought against Lorillard and/or the tobacco industry; and the possibility and likelihood of success on appeal. Lorillard’s assessment of a possible loss or range of loss is based on its assessment of the final outcome of the litigation upon the conclusion of all appeals. | |||||
Lorillard records provisions in the consolidated financial statements for pending litigation when it determines that it is probable that a loss has been incurred and the amount of loss can be reasonably estimated. Except for the impact of the State Settlement Agreements, the U.S. Government Case and certain Engle Progeny Cases as described below, while it is reasonably possible that a loss has been incurred, (i) management has concluded that it is not probable that a loss has been incurred in any material pending litigation against Lorillard, (ii) management is unable to estimate the possible loss or range of loss that could result from an unfavorable outcome in any material pending litigation due to the many variables, uncertainties and complexities described above, and (iii) accordingly, management has not provided any amounts in the consolidated financial statements for possible losses related to material pending litigation. It is possible that Lorillard’s results of operations or cash flows in a particular quarterly or annual period or its financial position could be materially adversely affected by an unfavorable outcome or settlement of certain pending or future litigation or an inability to secure bonds where required to stay the execution of judgments on appeal. | |||||
Tobacco-Related Product Liability Litigation | |||||
Conventional Product Liability Cases | |||||
Since January 1, 2010, verdicts have been returned in eleven Conventional Product Liability Cases against cigarette manufacturers. Lorillard Tobacco was the only defendant in one of these eleven trials, Evans v. Lorillard Tobacco Company (Superior Court, Suffolk County, Massachusetts). In December 2010, the jury in Evans awarded $50 million in compensatory damages to the estate of a deceased smoker, $21 million in damages to the deceased smoker’s son, and $81 million in punitive damages. In September 2011, the court granted in part Lorillard Tobacco’s motion to reduce the jury’s damages awards. In December 2011, the court entered a final judgment that awarded $35 million in compensatory damages, $81 million in punitive damages, approximately $2.6 million in attorneys’ fees and costs, and interest on the damages awards at the rate of 12% per year from the date the case was filed in 2004. On June 11, 2013, the Massachusetts Supreme Judicial Court affirmed the compensatory damages award but remanded the case to the trial court for a new trial on the issue of punitive damages, finding that the jury was inadequately instructed regarding the application of various theories of negligence. Lorillard Tobacco filed a petition for rehearing, which was denied on July 26, 2013. In September 2013, plaintiff filed a motion seeking immediate entry of judgment on the compensatory damages award. At a status conference on September 17, 2013, the trial judge rejected defendant’s proposed procedures for retrial of plaintiff’s claims. Consequently, Lorillard Tobacco has incurred a charge of $79 million, including $35 million for compensatory damages plus statutory interest of 12% per year since June 28, 2004. This charge was reflected in selling, general and administrative expense for the third quarter 2013. This amount was paid in October 2013, and the case has been dismissed in its entirety and is now concluded. | |||||
Neither Lorillard Tobacco nor Lorillard, Inc. was a defendant in the ten other trials since January 1, 2010. Juries found in favor of the plaintiffs and awarded compensatory damages in four of these trials and also awarded $4.0 million in punitive damages in one of these trials. Defendants appealed the verdicts in three of these trials. The verdict in the first case was affirmed on appeal in July 2013; judgment has since been satisfied and this case is concluded. As of February 14, 2014 the appeal in the second case remains pending. In September 2013, an agreement was reached between the parties in the third case and no further appellate review will be taken. Satisfaction of judgment has been filed and this case is concluded. An appeal is pending in the fourth case. The plaintiff in another case was awarded $25 million in punitive damages in a retrial ordered by an appellate court in which the jury was permitted to consider only the amount of punitive damages to award. Defendant’s appeal of the judgment in this case remains pending. Juries found in favor of the defendants in the five other trials. Three of these five cases have concluded. Plaintiffs in two of the cases did not pursue appeals. Plaintiff in the third case noticed an appeal, which was affirmed in February 2013, and then did not seek any further review. In December 2012, the Court granted a post-trial motion for a new trial filed by the plaintiff in the fourth case, however, the defendant’s motion for reconsideration was granted by the Court, and a new order was entered which denied plaintiff’s motion for a new trial. The plaintiff filed a petition for review of this decision with the Alaska Supreme Court, which was denied in April 2013. Plaintiff’s appeal of the order denying the motion for a new trial remains pending. The plaintiff in the fifth case filed a motion for a new trial, which was denied in August 2013. This case is currently on appeal. | |||||
In rulings addressing cases tried in earlier years, some appellate courts have reversed verdicts returned in favor of the plaintiffs in whole or in part, while other judgments that awarded damages to smokers have been affirmed on appeal. Manufacturers have exhausted their appeals and have been required to pay damages to plaintiffs in fifteen individual cases since 2001. Punitive damages were paid to the smokers in six of these cases. Neither Lorillard Tobacco nor Lorillard, Inc. was a party to any of these matters. | |||||
As of February 14, 2014, there were six cases scheduled for trial in 2014. As of February 14, 2014, Lorillard Tobacco is a defendant in one of these cases. Lorillard, Inc. is not a defendant in any of these cases. Trial dates are subject to change. | |||||
Engle Progeny Cases | |||||
In 2006, the Florida Supreme Court issued a ruling in Engle v. R.J. Reynolds Tobacco Co., et al., that had been certified as a class action on behalf of Florida residents, and survivors of Florida residents, who were injured or died from medical conditions allegedly caused by addiction to smoking. During a three-phase trial, a Florida jury awarded compensatory damages to three individuals and approximately $145 billion in punitive damages to the certified class. In its 2006 decision, the Florida Supreme Court vacated the punitive damages award, determined that the case could not proceed further as a class action and ordered decertification of the class. The Florida Supreme Court also reinstated the compensatory damages awards to two of the three individuals whose claims were heard during the first phase of the Engle trial. These two awards totaled $7 million, and both verdicts were paid in February 2008. Lorillard Tobacco’s payment to these two individuals, including interest, totaled approximately $3 million. | |||||
The Florida Supreme Court’s 2006 ruling also permitted Engle class members to file individual actions, including claims for punitive damages. The court further held that these individuals are entitled to rely on a number of the jury’s findings in favor of the plaintiffs in the first phase of the Engle trial. The time period for filing Engle Progeny Cases expired in January 2008 and no additional cases may be filed. In 2009, the Florida Supreme Court rejected a petition that sought to extend the time for purported class members to file an additional lawsuit. | |||||
Engle Progeny Cases are pending in various Florida state and federal courts. Some of the Engle Progeny Cases were filed on behalf of multiple plaintiffs. Various courts have entered orders severing the cases filed by multiple plaintiffs into separate actions. In 2009, one Florida federal court entered orders that severed the claims of approximately 4,400 Engle Progeny plaintiffs, initially asserted in a small number of multi-plaintiff actions, into separate lawsuits. In some cases, spouses or children of alleged former class members have also brought derivative claims. In 2011, approximately 500 cases that were among the 4,400 cases severed into separate lawsuits in 2009, filed by family members of alleged former class members, were combined with the cases filed by the smoker from which the family members’ claims purportedly derived. On August 1, 2013, Judge William G. Young of the District of Massachusetts took over responsibility for the Engle cases in the Middle District of Florida, Jacksonville Division. Judge Young issued an order that day that called for three groups of cases to be prepared for trial on the following schedule: approximately 50 cases to be made trial ready by January 2, 2014, approximately 107 cases to be made trial ready by May 2014, and approximately 120 cases to be made trial ready by September 2, 2014. Since the issuance of this order, 45 of the cases to be prepared for trial have been dismissed in their entirety, and Lorillard Tobacco has been dismissed from an additional three cases involving other defendants. These cases have either been voluntarily dismissed or resolved. On January 17, 2014, Judge Young issued an order calling for an additional three groups of cases to be prepared for trial on the following schedule: approximately 200 cases to be made trial ready by January 2, 2015, approximately 150 cases to be made trial ready by April 1, 2015, and approximately 150 cases to be made trial ready by July 1, 2015. | |||||
Since January 2010 and through February 14, 2014, the United States District Court for the Middle District of Florida has dismissed a total of approximately 3,309 cases. In some instances, the plaintiffs whose cases were dismissed also were pursuing cases pending in other courts. In other instances, the attorneys who represented the plaintiffs asked the court to enter dismissal orders because they were no longer able to contact their clients. In January 2013, the Court granted a motion by defendants and dismissed approximately 520 cases in which the plaintiffs were deceased at the time their personal injury lawsuits were filed. Plaintiffs appealed the dismissal of these 520 cases to the United States Court of Appeal for the Eleventh Circuit, and as of February 14, 2014, this appeal remains pending. In June 2013, the Court dismissed an additional approximately 440 cases for a variety of reasons. Plaintiffs have appealed the dismissal of approximately 70 of these cases, in which the plaintiffs were deceased at the time their personal injury lawsuits were filed or where the cases were barred by the statute of limitations. The Court granted plaintiffs’ motion to consolidate the appeals from the January and June orders dismissing these groups of federal cases. Other courts, including state courts, have entered orders dismissing additional cases. | |||||
Various intermediate state and federal Florida appellate courts have issued rulings that address the scope of the preclusive effect of the findings from the first phase of the Engle trial, including whether those findings relieve plaintiffs from the burden of proving certain legal elements of their claims. The Florida Supreme Court granted review in the Douglas case, in which a verdict awarding compensatory damages to the plaintiff was affirmed by an intermediate state Florida appellate court, to address the issue of whether a tobacco manufacturer’s due process rights are violated by reliance upon the Engle Phase I findings. On March 14, 2013, the Florida Supreme Court ruled that application of the Engle Phase I findings to establish certain elements of plaintiffs’ claims is not a violation of the Engle defendants’ due process rights. In order to prevail on either strict liability or negligence claims, the Court found that an Engle plaintiff must establish (i) membership in the Engle class; (ii) that addiction to smoking the Engle defendants’ cigarettes containing nicotine was a legal cause of the injuries the plaintiff alleged; and (iii) damages. On August 12, 2013, defendants filed a petition with the United States Supreme Court seeking review of the Florida Supreme Court’s decision. This petition for review was denied on October 7, 2013. The due process issue was also on appeal in the United States Court of Appeals for the Eleventh Circuit in two cases that had been consolidated for appeal: Duke and Walker. On September 6, 2013, the United States Court of Appeals for the Eleventh Circuit affirmed the verdicts in these cases, holding that the judgment of the Florida Supreme Court in Douglas should be given full faith and credit, and that deference to the decision in Douglas did not violate the due process rights of the defendant. The defendant filed a petition for rehearing of the decision in Duke and Walker with the United States Court of Appeals for the Eleventh Circuit in October 2013. On October 31, 2013, the United States Court of Appeals for the Eleventh Circuit vacated and reconsidered its original opinion. The Court entered a new opinion that is substantively similar to the original opinion. On November 7, 2013, the Court denied defendant’s petition for rehearing. On November 13, 2013, the defendant filed a second petition, seeking review of the October 31, 2013 opinion. On January 6, 2014, the Court denied this petition. | |||||
Various courts, including appellate courts, have issued rulings that have addressed the conduct of the cases prior to trial. One intermediate state appellate court ruled in 2011 that plaintiffs are permitted to assert a claim against a cigarette manufacturer even if the smoker did not smoke a brand sold by that manufacturer. Defendants’ petition for review of this decision by the Florida Supreme Court was denied in August 2012. In March 2012, another intermediate state appellate court agreed with the 2011 ruling and reversed dismissals in a group of cases. In June and July 2013, the Florida Supreme Court denied defendants’ petitions for review of the intermediate appellate court’s decision in these cases. These rulings may limit the ability of the defendants, including Lorillard Tobacco and Lorillard, Inc., to be dismissed from cases in which smokers did not use a cigarette manufactured by Lorillard Tobacco. In October 2012, the Florida First District Court of Appeal affirmed the judgment awarding compensatory damages in one case, however the appeals court certified to the Florida Supreme Court the question of whether Engle class members may pursue an award of punitive damages based on claims of negligence or strict liability. As of February 14, 2014, the Florida Supreme Court had not announced whether it would grant review of this case. In June 2013, the Florida Supreme Court reversed an intermediate state appellate court and held that a plaintiff’s representative may continue to litigate an existing lawsuit after the original plaintiff has died. As of February 14, 2014, no petition seeking further review of this decision has been filed. In December 2013, the Florida First District Court of Appeal affirmed the summary judgments in favor of the defendants regarding three plaintiffs who had opted out of the Engle class and subsequently reapplied for admission. The Court held that the Florida Supreme Court’s decision in Engle did not provide any basis for the readmission of a former class member in the event that they had timely opted out of the class and did not initiate an individual action until after the statute of limitations had run. Lorillard Tobacco was a defendant in two of these cases. | |||||
In connection with the Engle Progeny Cases, Lorillard and various other tobacco manufacturing defendants face various other legal issues that could materially affect the outcome of the Engle cases. These legal issues include, but are not limited to, the application of the statute of limitations and statute of repose, the constitutionality of a cap on the amount of a bond necessary to obtain an automatic stay of a post-trial judgment, whether a judgment based on a claim of intentional conduct should be reduced by a jury’s findings of comparative fault, and whether damages can be awarded jointly and severally. Various intermediate Florida appellate courts and Florida Federal Courts have issued rulings on these issues. | |||||
Lorillard Tobacco and Lorillard, Inc. are defendants in Engle Progeny Cases that have been placed on courts’ 2014 and 2015 trial calendars or in which specific trial dates have been set. Trial schedules are subject to change and it is not possible to predict how many of the cases pending against Lorillard Tobacco or Lorillard, Inc. will be tried in 2014. It also is not possible to predict whether some courts will implement procedures that consolidate multiple Engle Progeny Cases for trial. | |||||
As of February 14, 2014, trial was not underway in any Engle Progeny Cases in which Lorillard Tobacco is a defendant. | |||||
As of February 14, 2014, verdicts had been returned in sixteen Engle Progeny Cases in which Lorillard Tobacco was a defendant. Lorillard, Inc. was a defendant in one of these sixteen cases at the time of verdict. Juries awarded compensatory damages to the plaintiffs in eleven of these cases. In three of the eleven cases in which juries awarded compensatory damages, plaintiffs were awarded punitive damages from Lorillard Tobacco. In another case, the court entered an order following trial that awarded plaintiff compensatory damages. Lorillard has accrued $21.9 million as of December 31, 2013 for three Engle Progeny Cases, Sury, Tullo and Mrozek, which is recorded as a charge to selling, general and administrative expenses in 2013. The sixteen cases in which Lorillard Tobacco was a defendant are listed below in the order in which the verdicts were returned: | |||||
• | In Rohr v. R.J. Reynolds Tobacco Company, et al. (Circuit Court, Seventeenth Judicial Circuit, Broward County, Florida), a jury returned a verdict in favor of the defendants, including Lorillard Tobacco, in October 2010. Plaintiff in Rohr did not pursue an appeal and the case is concluded. | ||||
• | In Mrozek v. Lorillard Tobacco Company (Circuit Court, Fourth Judicial Circuit, Duval County, Florida), the jury awarded plaintiff a total of $6 million in compensatory damages and $11.3 million in punitive damages, in March 2011. The jury apportioned 35% of the fault for the smoker’s injuries to the smoker and 65% to Lorillard Tobacco. The final judgment entered by the trial court reflected the jury’s verdict and awarded plaintiff $3,900,588 in compensatory damages and $11,300,000 in punitive damages plus 6% annual interest. A motion filed by Lorillard Tobacco to disqualify the trial judge based on comments he made in another Engle Progeny trial was denied in July 2012 and a petition filed by Lorillard Tobacco requesting that the Florida First District Court of Appeal review that decision was denied in January 2013. In December 2012, the Florida First District Court of Appeal affirmed the final judgment awarding compensatory and punitive damages and Lorillard Tobacco’s motion for rehearing of the appellate court opinion was denied in February 2013. In March 2013, Lorillard Tobacco filed a notice with the Florida Supreme Court seeking review of the appellate court decision. In April 2013, the Florida Supreme Court ordered Lorillard Tobacco to show cause why the Florida Supreme Court’s decision in Douglas, which addressed the application of the Engle Phase I findings, is not controlling in this case. Lorillard Tobacco filed a response to this order in May 2013. On February 14, 2014, the Florida Supreme Court declined to grant review of this case. The Florida First District Court of Appeal provisionally granted plaintiff’s motion for appellate attorneys’ fees, ruling that the trial court is authorized to award appellate fees if the trial court determines entitlement to attorneys’ fees. In June 2013, the trial court granted plaintiff’s motion for entitlement to trial court attorneys’ costs and fees and also determined that plaintiff was entitled to intermediate appellate court attorneys’ fees. As of February 14, 2014, the trial court had not determined the amount of trial court or appellate fees to award. On November 18, 2013, plaintiff filed a motion with the Florida Supreme Court seeking attorneys’ fees in connection with the appeal to the Florida Supreme Court. On February 14, 2014, the Florida Supreme Court provisionally granted plaintiff’s motion for attorney fees for $2,500, subject to the trial court’s determination. | ||||
• | In Tullo v. R.J. Reynolds, et al. (Circuit Court, Fifteenth Judicial Circuit, Palm Beach County, Florida), the jury awarded plaintiff a total of $4.5 million in compensatory damages, in April 2011. The jury assessed 45% of the fault to the smoker, 5% to Lorillard Tobacco and 50% to other defendants. The jury did not award punitive damages to the plaintiff. The court entered a final judgment that awarded plaintiff $225,000 in compensatory damages from Lorillard Tobacco plus 6% annual interest. Defendants noticed an appeal from the final judgment to the Florida Fourth District Court of Appeal. In August 2013, the Florida Fourth District Court of Appeal affirmed the final judgment. Defendants filed a notice with the Florida Supreme Court seeking review of the appellate court decision. As of February 14, 2014, the Florida Supreme Court had not announced whether it would grant review. The Florida Fourth District Court of Appeal provisionally granted plaintiff’s motion for appellate attorneys’ fees, ruling that the trial court is authorized to award appellate fees if the trial court determines entitlement to attorneys’ fees. As of February 14, 2014, the trial court had not determined the amount of trial court or appellate fees to award. | ||||
• | In Sulcer v. Lorillard Tobacco Company, et al. (Circuit Court, First Judicial Circuit, Escambia County, Florida), in April 2011, the jury awarded $225,000 in compensatory damages to the plaintiff and it assessed 95% of the fault for the smoker’s injuries to the smoker with 5% allocated to Lorillard Tobacco. The jury returned a verdict for Lorillard Tobacco as to whether plaintiff is entitled to punitive damages. The court entered a final judgment that incorporated the jury’s determination of the parties’ fault and awarded plaintiff $11,250 in compensatory damages. Lorillard Tobacco paid approximately $246,000 to resolve the verdict, costs and fees, as well as all post-trial motions and any potential appeal by the plaintiff. Following this payment, Sulcer was concluded. | ||||
• | In Jewett v. R.J. Reynolds Tobacco Co., et al. (Circuit Court, Fourth Judicial Circuit, Duval County, Florida), the jury awarded the estate of the decedent $692,981 in compensatory damages and awarded the plaintiff $400,000 for loss of companionship in May 2011. The jury assessed 70% of the responsibility for the decedent’s injuries to the decedent, 20% to R.J. Reynolds and 10% to Lorillard Tobacco. The jury returned a verdict for the defendants regarding whether punitive damages were warranted. The final judgment entered by the trial court reflected the jury’s verdict and awarded plaintiff a total of $109,298 from Lorillard Tobacco plus 6% annual interest. In June 2012, an agreement was reached between the parties as to the amount of trial court costs and attorneys’ fees incurred, should the judgment be upheld on appeal, and plaintiff’s motion for costs and attorneys’ fees was withdrawn. In November 2012, the Florida First District Court of Appeal reversed the judgment awarding compensatory damages and ordered the case returned to the trial court for a new trial. In January 2013, the appellate court denied a motion filed by the plaintiff for rehearing of the decision reversing the judgment. Both the plaintiff and defendants have filed notices with the Florida Supreme Court seeking review of the appellate court decision. On February 14, 2014, the Florida Supreme Court declined to grant review of this case. | ||||
• | In Weingart v. R.J. Reynolds Tobacco Company, et al. (Circuit Court, Fifteenth Judicial Circuit, Palm Beach County, Florida), in July 2011, the jury determined that the decedent did not sustain any compensatory damages from the defendants, including Lorillard Tobacco, and it returned a verdict for the defendants that punitive damages were not warranted. The jury assessed 91% of the fault for the decedent’s injuries to the decedent, 3% to Lorillard Tobacco and 3% to each of the other two defendants. Following trial, the court granted in part a motion filed by the plaintiff to award damages and it awarded plaintiff $150,000 in compensatory damages. The court entered a final judgment that applied the jury’s comparative fault determinations to the court’s award of compensatory damages. The final judgment awarded plaintiff $4,500 from Lorillard Tobacco. Defendants noticed an appeal to the Florida Fourth District Court of Appeal from the order that awarded compensatory damages to the plaintiff and amended their notice of appeal to address the final judgment. On February 13, 2013, the Florida Fourth District Court of Appeal affirmed the final judgment awarding compensatory damages. Defendants filed a notice with the Florida Supreme Court seeking review of this decision. In March 2012, the trial court entered a judgment against the defendants for costs with Lorillard Tobacco’s share amounting to $43,081 plus 4.75% annual interest. Defendants noticed an appeal from this costs judgment. In June 2013, all defendants satisfied both the final judgment awarding compensatory damages and the costs judgment, with Lorillard Tobacco’s share amounting to approximately $50,000. Defendants’ petition for Florida Supreme Court review and the appeal from the costs judgment have been dismissed. This case is now concluded. | ||||
• | In Sury v. R.J. Reynolds Tobacco Company, et al. (Circuit Court, Fourth Judicial Circuit, Duval County, Florida), in November 2011, the jury awarded plaintiff $1,000,000 in compensatory damages and assessed 60% of the responsibility for the decedent’s injuries to the decedent, 20% to Lorillard Tobacco and 20% to R.J. Reynolds. The jury returned a verdict for the defendants regarding whether punitive damages were warranted. In March 2012, the court entered a final judgment against defendants in the amount of $1,000,000, jointly and severally, plus 4.75% annual interest, declining to apply the jury’s comparative fault findings to causes of action alleging intentional conduct. On June 24, 2013, the Florida First District Court of Appeal affirmed the final judgment awarding compensatory damages to the plaintiff. Lorillard Tobacco’s motion for rehearing of this decision with the Florida First District Court of Appeal was denied in August 2013. The Florida Supreme Court declined review of the intermediate appellate court decision in January 2014. In December 2012, Lorillard Tobacco reached an agreement with the plaintiff to resolve the trial costs and fees, conditioned on the judgment being upheld on appeal. In June 2013, the First District Court of Appeal determined that plaintiff was entitled to attorneys’ fees in connection with the appeal to the First District Court of Appeal and directed the trial court to determine the amount. As of February 14, 2014, the trial court had not determined the amount. In October 2013, the plaintiff filed a motion with the Florida Supreme Court seeking attorneys’ fees and costs in connection with the appeal to the Florida Supreme Court. The Florida Supreme Court granted the motion and awarded plaintiff $2,500 in fees. | ||||
• | In Alexander v. Lorillard Tobacco Company, et al. (Circuit Court, Eleventh Judicial Circuit, Miami-Dade County, Florida), the jury awarded plaintiff $20,000,000 in compensatory damages and $25,000,000 in punitive damages in February and March 2012. Lorillard Tobacco is the only defendant in this case. The jury apportioned 20% of the fault for the smoker’s injuries to the smoker and 80% to Lorillard Tobacco. In March 2012, the court entered a final judgment that applied the jury’s comparative fault determination to the court’s award of compensatory damages, awarding the plaintiff $16,000,000 in compensatory damages and $25,000,000 in punitive damages from Lorillard Tobacco. In May 2012, the court granted a motion by Lorillard Tobacco to lower the amount of compensatory damages and reduced the amount awarded to $10,000,000 from Lorillard Tobacco. Other post-trial motions challenging the verdict were denied. The court entered an amended final judgment that applied the jury’s comparative fault determination to the court’s award of compensatory damages, awarding the plaintiff $8,000,000 in compensatory damages and $25,000,000 in punitive damages, plus the statutory rate of interest, which is currently 4.75%. Lorillard Tobacco noticed an appeal from the amended final judgment to the Florida Third District Court of Appeal. On September 4, 2013, the Florida Third District Court of Appeal affirmed the amended final judgment. Lorillard Tobacco’s motion for rehearing of this decision with the Florida Third District Court of Appeal was denied in October 2013. On November 27, 2013, Lorillard Tobacco filed a petition with the Florida Supreme Court seeking review of the intermediate appellate court decision. As of February 14, 2014, the Florida Supreme Court had not announced whether it would grant review of this case. In September 2012, an agreement was reached between the parties as to the amount of trial costs and attorneys’ fees incurred, should the judgment be upheld on appeal. On January 3, 2014, the plaintiff filed a motion with the Florida Supreme Court seeking appellate attorneys’ fees in connection with the appeal to the Florida Supreme Court. As of February 14, 2014, the Florida Supreme Court had not ruled on this motion. In September 2013, the Florida Third District Court of Appeal determined that plaintiff was entitled to intermediate appellate court attorneys’ fees in connection with the appeal to the Florida Third District Court of Appeal and directed the trial court to determine the amount. As of February 14, 2014, the trial court had not determined the amount of such attorneys’ fees to award. | ||||
• | In Calloway v. R.J. Reynolds Tobacco Company, et al. (Circuit Court, Seventeenth Judicial Circuit, Broward County, Florida), the jury awarded plaintiff and a daughter of the decedent a total of $20,500,000 in compensatory damages in May 2012. The jury apportioned 20.5% of the fault for the smoker’s injuries to the smoker, 27% to R.J. Reynolds, 25% to Philip Morris, 18% to Lorillard Tobacco, and 9.5% to Liggett. The jury awarded $12,600,000 in punitive damages from Lorillard Tobacco and $42,250,000 from the other defendants, for a total punitive damages award of $54,850,000. In August 2012, the court granted a post-trial motion by the defendants and lowered the compensatory damages award to $16,100,000. The court also ruled that the jury’s finding on the plaintiff’s percentage of comparative fault would not be applied to reduce the compensatory damage award because the jury found in favor of the plaintiff on her claims alleging intentional conduct. In August 2012, the court entered final judgment against defendants in the amount of $16,100,000 in compensatory damages, jointly and severally, and $54,850,000 ($12,600,000 from Lorillard Tobacco) in punitive damages, plus the statutory rate of interest. The final judgment also granted plaintiff’s application for trial court costs and attorneys’ fees, but as of February 14, 2014, the trial court had not awarded an amount. Defendants have noticed an appeal from the final judgment to the Florida Fourth District Court of Appeal. | ||||
• | In Evers v. R.J. Reynolds Tobacco Company, et al. (Circuit Court, Thirteenth Judicial Circuit, Hillsborough County, Florida), the jury awarded plaintiff and the estate of the decedent a total of $3,230,000 in compensatory damages in February 2013. The jury apportioned 31% of the fault for the smoker’s injuries to the smoker, 60% to R.J. Reynolds and 9% to Lorillard Tobacco. The jury found that punitive damages against Lorillard Tobacco were not warranted and awarded $12,362,042 in punitive damages from R.J. Reynolds Tobacco Company. The Court granted a post-trial motion by R.J. Reynolds for a directed verdict on punitive damages and, as a result, the jury’s punitive damages award was set aside. The Court denied a motion filed by the plaintiff to reconsider the directed verdict. At a post-trial hearing, the plaintiff waived entitlement to the jury’s loss of services award which amounted to $280,000 of the total compensatory damages award. In May, 2013, the court entered a final judgment that applied the jury’s comparative fault determinations and awarded plaintiff and the estate of the decedent $2,035,500 in compensatory damages ($256,500 from Lorillard Tobacco), plus the statutory rate of interest. Plaintiff and defendants have both appealed the final judgment to the Florida Second District Court of Appeal. Plaintiff also filed a motion for entitlement to trial attorneys’ fees and costs. As of February 14, 2014, the trial court had not ruled on this motion. In January 2014, plaintiff filed another petition with the Florida Fourth District Court of Appeal seeking to disqualify the trial judge. As of February 14, 2014, the trial court had not ruled on this motion. | ||||
• | In Cohen v. R.J. Reynolds Tobacco Company, et al. (Circuit Court, Fifteenth Judicial Circuit, Palm Beach County, Florida), the jury awarded plaintiff and the estate of the decedent a total of $2,055,050 in compensatory damages in May 2013. The jury apportioned 40% of the fault for the smoker’s injuries to the smoker, 30% to R.J. Reynolds, 20% to Lorillard Tobacco, and 10% to Liggett. The jury found that punitive damages were not warranted against any of the defendants. On May 6, 2013, the Court entered final judgment against defendants in the amount of $1,233,030 ($411,010 from Lorillard Tobacco) plus 4.75% annual interest. On July 10, 2013, the Court entered an order granting defendants’ motion for a new trial based on the plaintiff’s improper arguments during closing. This order effectively vacated the final judgment. Plaintiff has filed a notice of appeal from the order granting the motion for new trial to the Florida Fourth District Court of Appeal. Plaintiff’s petition with the Florida Fourth District Court of Appeal seeking to disqualify the trial court judge from further consideration of this case was denied in November 2013. | ||||
• | In LaMotte v. R.J. Reynolds Tobacco Company, et al. (Circuit Court, First Judicial Circuit, Escambia County, Florida), the jury returned a verdict in favor of the defendants in May 2013. The Court entered final judgment in favor of the defendants in May 2013. Plaintiff has agreed to waive any post-trial or appellate review of the verdict and judgment, and defendants have agreed not to seek to recover costs or fees. This case is concluded. | ||||
• | In Ruffo v. R.J. Reynolds Tobacco Company, et al. (Circuit Court, Eleventh Judicial Circuit, Miami-Dade County, Florida), the jury awarded plaintiff $1,500,000 in compensatory damages in May 2013. The jury apportioned 85% of the fault for the smoker’s injuries to the smoker, 12% to Philip Morris, and 3% to Lorillard Tobacco. Defendants’ post-trial motions challenging the verdict were denied. On October 4, 2013, the Court entered a final judgment against defendants that applied the jury’s comparative fault determinations and awarded plaintiff $225,000 in compensatory damages ($45,000 from Lorillard Tobacco) plus the statutory rate of interest which is currently 4.75%. Defendants have noticed an appeal from the final judgment to the Florida Third District Court of Appeal. Plaintiff has filed a motion with the trial court seeking entitlement to attorneys’ costs and fees. As of February 14, 2014, the trial court had not ruled on this motion. | ||||
• | In Gafney v. R.J. Reynolds Tobacco Company, et al. (Circuit Court, Fifteenth Judicial Circuit, Palm Beach County, Florida), the jury awarded plaintiff a total of $5,800,000 in compensatory damages in September 2013. The jury apportioned 34% of the fault for the smoker’s injuries to the smoker, 33% to R.J. Reynolds, and 33% to Lorillard Tobacco. Lorillard, Inc. was also a defendant in this trial but damages and comparative fault were not assessed separately for Lorillard, Inc. Because the jury found in favor of the defendants on the claims alleging intentional conduct, the plaintiff was not entitled to punitive damages. On September 26, 2013, the Court entered a final judgment that applied the jury’s comparative fault determinations and awarded the plaintiff a total of $3,828,000 in compensatory damages ($1,914,000 from Lorillard Tobacco), plus the statutory rate of interest. Defendants’ post-trial motions challenging the verdict were denied in November 2013. Defendants have noticed an appeal from the final judgment to the Florida Fourth District Court of Appeal. Plaintiff has filed a motion with the trial court seeking entitlement to attorneys’ fees and costs. As of February 14, 2014, the trial court had not ruled on this motion. | ||||
• | In Jacobson v. R.J. Reynolds Tobacco Company, et al. (Federal Court, Southern District, Florida), the jury returned a verdict in favor of the defendants on October 29, 2013. The Court entered final judgment in favor of the defendants on October 30, 2013. Plaintiff filed a motion for new trial which was denied in January 2014. On February 10, 2014, the Court entered an order granting Lorillard’s motion for attorneys’ fees and costs, Lorillard has agreed not to enforce its right to fees and costs in exchange for plaintiff’s agreement not to pursue an appeal the verdict. | ||||
• | In Chamberlain v. R. J. Reynolds Tobacco Company, et al. (Federal Court, Middle District, Jacksonville, Florida) the jury returned a verdict in favor of the defendants on November 15, 2013. The Court entered final judgment in favor of the defendants on November 20, 2013. Plaintiff has filed a motion for new trial. As of February 14, 2014, the Court had not ruled on this motion. | ||||
As of February 14, 2014, trial was underway in three Engle Progeny Cases in which Lorillard Tobacco or Lorillard, Inc. was not a defendant: Goveia v. R.J. Reynolds Tobacco Company, et al. (Circuit Court, Orange County, Florida), Banks v. R.J. Reynolds Tobacco Company, et al. (Circuit Court, Broward County, Florida) and Wendel v. R.J. Reynolds Company, et al. (Circuit Court, Miami-Dade County, Florida). | |||||
As of February 14, 2014, verdicts have been returned in 100 Engle Progeny trials since the Florida Supreme Court issued its 2006 ruling that permitted members of the Engle class to bring individual lawsuits in which neither Lorillard Tobacco nor Lorillard, Inc. was a defendant at trial. Juries awarded compensatory damages and punitive damages in 31 of the trials. The 31 punitive damages awards have totaled approximately $709 million and have ranged from $20,000 to $244 million. In 30 of the trials, juries’ awards were limited to compensatory damages. In the 39 remaining trials, juries found in favor of the defendants. Post-trial motions challenging the verdicts in some cases and appeals from final judgments in some cases are pending before various Florida circuit and intermediate appellate courts. As of February 14, 2014, one verdict in favor of the defendants and three verdicts in favor of the plaintiff have been reversed on appeal and returned to the trial court for a new trial on all issues. In ten cases, the appellate courts have ruled that the issue of damages awarded must be revisited by the trial court. Motions for rehearing of these appellate court rulings are pending in some cases. | |||||
In a case tried prior to the Florida Supreme Court’s 2006 decision permitting members of the Engle class to bring individual lawsuits, one Florida court allowed the plaintiff to rely at trial on certain of the Engle jury’s findings. That trial resulted in a verdict for the plaintiffs in which they were awarded approximately $25 million in compensatory damages. Neither Lorillard Tobacco nor Lorillard, Inc. was a party to this case. In March 2010, a Florida appellate court affirmed the jury’s verdict. The court denied defendants’ petitions for rehearing in May 2010, and the defendants have satisfied the judgment by paying the damages award. In June 2009, Florida amended the security requirements for a stay of execution of any judgment during the pendency of appeal in Engle Progeny Cases. The amended statute provides for the amount of security for individual Engle Progeny Cases to vary within prescribed limits based on the number of adverse judgments that are pending on appeal at a given time. The required security decreases as the number of appeals increases to ensure that the total security posted or deposited does not exceed $200 million in the aggregate. This amended statute applies to all judgments entered on or after June 16, 2009. The plaintiffs in some cases challenged the constitutionality of the amended statute. These motions were denied, withdrawn or declared moot. In January 2012, the Florida Supreme Court agreed to review one of the orders denying a challenge to the amended statute. In August 2012, the Florida Supreme Court dismissed the appeal as moot because the defendant had satisfied the judgment. | |||||
West Virginia Individual Personal Injury Cases | |||||
The West Virginia Individual Personal Injury Cases (the “IPIC Cases”) are brought in a single West Virginia court by individuals who allege cancer or other health effects caused by smoking cigarettes, smoking cigars, or using smokeless tobacco products. Approximately 600 IPIC Cases are pending. Most of the pending cases have been consolidated for trial. The order that consolidated the cases for trial, among other things, also limited the consolidation to those cases that were filed by September 2000. No additional IPIC Cases may be consolidated for trial with this group. The court has entered a trial plan for the IPIC Cases that calls for a multi-phase trial. | |||||
In September 2000, there were approximately 1,250 IPIC Cases, and Lorillard Tobacco was named in all but a few of them. Plaintiffs in most of the cases alleged injuries from smoking cigarettes, and the claims alleging injury from smoking cigarettes were consolidated for a multi-phase trial. Approximately 645 IPIC Cases were dismissed in their entirety. Lorillard Tobacco has been dismissed from approximately 565 additional IPIC Cases because those plaintiffs did not submit evidence that they used a Lorillard Tobacco product. These additional IPIC Cases remain pending against other cigarette manufacturers. As of February 14, 2014, Lorillard Tobacco is a defendant in 31 of the pending IPIC Cases. Lorillard, Inc. is not a defendant in any of the IPIC Cases. | |||||
The first phase of the consolidated trial began April 15, 2013, and ended with a Phase I verdict returned by the jury on May 15, 2013. In its verdict, the jury found against plaintiffs on their claims for design defect, negligent design, failure to warn, intentional concealment and breach of express warranty. The jury found for plaintiffs on their claim that all ventilated filter cigarettes manufactured and sold by the defendants between 1964 and July 1, 1969 were defective because of a failure to instruct, but found that defendants’ conduct was not willful or wanton. In pleadings filed before trial, no plaintiff in a pending IPIC Case claims to have smoked a ventilated filtered cigarette manufactured and sold by Lorillard Tobacco between 1964 and July 1, 1969. | |||||
Plaintiffs and defendants both filed post-trial motions on July 15, 2013, On September 16, 2013, the court entered a judgment on the jury’s Phase I verdict and entered a separate order denying the parties’ post-trial motions. Plaintiffs filed a motion to alter or amend the judgment on September 24, 2013. In a telephone conference on October 7, 2013 (memorialized in an order entered October 28, 2013), the court informed the parties that, on its own authority, it was vacating the September 16, 2013 judgment and order. On October 28, 2013, the court entered a new judgment and order. The judgment recited that: 1) ventilated filter cigarettes the defendants manufactured and sold between 1964 and July 1, 1969, were found to be defective due to a failure to instruct consumers as to their use; 2) all other cigarettes manufactured and sold by defendants were not found to be defective; 3) defendants’ conduct did not justify an award of punitive damages; 4) there remains to be decided the claims of the individual plaintiffs consistent with the Phase I verdict, and 5) there is no just reason for delay in permitting any appellate rights of the parties to be perfected as to the verdict rendered and this order. The order; 1) denied the parties’ post-trial motions; 2) entered final judgments against the plaintiffs in the approximately 645 IPIC cases that were dismissed before trial; and 3) stated that those dismissal orders are now final and available for the proper application of the appellate process. | |||||
On November 26, 2013, plaintiffs filed a notice of appeal from the October 28 judgment and order in the Supreme Court of Appeals of West Virginia. The defendants did not file a separate notice of appeal, but may raise one or more issues on cross-appeal. On December 6, 2013, the Supreme Court of Appeals entered a scheduling order requiring plaintiffs to perfect their appeal by filing their brief and appendix no later than March 3, 2014, and giving defendants 45 days after the appeal is perfected to file their respondents’ brief. | |||||
The court has severed from the IPIC Cases those claims alleging injury from the use of tobacco products other than cigarettes, including smokeless tobacco and cigars (the “Severed IPIC Claims”). The Severed IPIC Claims involve 30 plaintiffs. Twenty-eight of these plaintiffs have asserted both claims alleging that their injuries were caused by smoking cigarettes as well as claims alleging that their injuries were caused by using other tobacco products. The former claims were included in the consolidated trial of the IPIC Cases, while the latter claims are among the Severed IPIC Claims. Lorillard Tobacco is a defendant in seven of the Severed IPIC Claims. Lorillard, Inc. is not a defendant in any of the Severed IPIC Claims. Two plaintiffs have asserted only claims alleging that injuries were caused by using tobacco products other than cigarettes, and no part of their cases was included in the consolidated trial of the IPIC Cases (the “Severed IPIC Cases”). Neither Lorillard Tobacco nor Lorillard, Inc. is a defendant in either of the Severed IPIC Cases. | |||||
As of February 14, 2014, the Severed IPIC Claims and the Severed IPIC Cases were not subject to a trial plan. None of the Severed IPIC Claims or the Severed IPIC Cases was scheduled for trial as of February 14, 2014. | |||||
Flight Attendant Cases | |||||
Lorillard Tobacco and three other cigarette manufacturers are the defendants in each of the pending Flight Attendant Cases. Lorillard, Inc. is not a defendant in any of these cases. These suits were filed as a result of a settlement agreement by the parties, including Lorillard Tobacco, in Broin v. Philip Morris Companies, Inc., et al. (Circuit Court, Miami-Dade County, Florida, filed October 31, 1991), a class action brought on behalf of flight attendants claiming injury as a result of exposure to environmental tobacco smoke. The settlement agreement, among other things, permitted the plaintiff class members to file these individual suits. These individuals may not seek punitive damages for injuries that arose prior to January 15, 1997. The period for filing Flight Attendant Cases expired in 2000 and no additional cases in this category may be filed. | |||||
The judges who have presided over the cases that have been tried have relied upon an order entered in October 2000 by the Circuit Court of Miami-Dade County, Florida. The October 2000 order has been construed by these judges as holding that the flight attendants are not required to prove the substantive liability elements of their claims for negligence, strict liability and breach of implied warranty in order to recover damages. The court further ruled that the trials of these suits are to address whether the plaintiffs’ alleged injuries were caused by their exposure to environmental tobacco smoke and, if so, the amount of damages to be awarded. | |||||
Lorillard Tobacco was a defendant in each of the eight Flight Attendant Cases in which verdicts have been returned. Defendants have prevailed in seven of the eight trials. In one of the seven cases in which a defense verdict was returned, the court granted plaintiff’s motion for a new trial and, following appeal, the case has been returned to the trial court for a second trial. The six remaining cases in which defense verdicts were returned are concluded. In the single trial decided for the plaintiff, French v. Philip Morris Incorporated, et al., the jury awarded $5.5 million in damages. The court, however, reduced this award to $500,000. This verdict, as reduced by the trial court, was affirmed on appeal and the defendants have paid the award. Lorillard Tobacco’s share of the judgment in this matter, including interest, was approximately $60,000. | |||||
As of February 14, 2014, none of the Flight Attendant Cases were scheduled for trial. | |||||
Class Action Cases | |||||
Lorillard Tobacco but not Lorillard Inc. is a defendant in the one pending Class Action Case, in which plaintiffs seek class certification on behalf of groups of cigarette smokers, or the estates of deceased cigarette smokers, who reside in West Virginia. There has been no substantive activity in this case since February 2001. | |||||
Cigarette manufacturers, including Lorillard Tobacco, have defeated motions for class certification in a number of cases. Motions for class certification have also been ruled upon in some of the “lights” cases or in other class actions to which neither Lorillard Tobacco nor Lorillard, Inc. was a party. In some of these cases, courts have denied class certification to the plaintiffs, while classes have been certified in other matters. On December 17, 2013, in Caronia, et al. v. Philip Morris USA, the New York Court of Appeals, answering a question certified to it by the United States Court of Appeals for the Second Circuit, held that current or former smokers that have not been diagnosed with a smoking-related disease could not pursue an independent cause of action for medical monitoring under New York law. | |||||
“Lights” Class Action Cases. Neither Lorillard Tobacco nor Lorillard, Inc. is a defendant in the approximately 19 Class Action Cases in which plaintiffs’ claims are based on the allegedly fraudulent marketing of “light” or “ultra-light” cigarettes. Classes have been certified in some of these cases. In one of these cases, Craft v. Philip Morris USA (Circuit Court, City of St. Louis, Missouri, filed February 29, 2000), trial began in September 2011. In November 2011, the court ordered a mistrial when the jury was unable to reach a verdict. The retrial of this case commenced January 6, 2014. In another of the “lights” Class Action Cases, Good v. Altria Group, Inc., et al., the U.S. Supreme Court ruled in December 2008 that neither the Federal Cigarette Labeling and Advertising Act nor the Federal Trade Commission’s regulation of cigarettes’ tar and nicotine disclosures preempts (or bars) some of plaintiffs’ claims. In 2009, the Judicial Panel on Multidistrict Litigation consolidated various federal court “lights” Class Action Cases pending against Philip Morris USA or Altria Group and transferred those cases to the U.S. District Court of Maine (the “MDL cases”). The court denied plaintiffs’ motion for class certification filed in four of the MDL Cases, and a federal appellate court declined to review the class certification order. Following the appellate court’s ruling, plaintiffs dismissed thirteen of the MDL Cases, including Good v. Altria Group, Inc., et al. In April, 2012, the Judicial Panel on Multidistrict Litigation entered an order transferring the four MDL cases that remained pending to the courts in which each originated. On September 23, 2013, in the “Lights” Class Action Case Brown v. The American Tobacco Company, Inc., et al. (Superior Court, San Diego County, California), the Court issued a Statement of Decision that granted judgment in favor of the defendant. The Court held that the defendant misrepresented the health benefits of its “light” cigarette but that plaintiffs were not entitled to restitution or injunctive relief. Final judgment was entered in favor of the defendant on October 15, 2013. In December 2013, plaintiffs filed a notice of appeal of the final judgment. | |||||
Reimbursement Cases | |||||
U.S. Government Case. In August 2006, the U.S. District Court for the District of Columbia issued its final judgment and remedial order in the federal government’s reimbursement suit, United States of America v. Philip Morris USA, Inc., et al. (U.S. District Court, District of Columbia, filed September 22, 1999). The final judgment and remedial order concluded a bench trial that began in September 2004. Lorillard Tobacco, other cigarette manufacturers, two parent companies and two trade associations were defendants in this action during trial. Lorillard, Inc. is not a party to this case. | |||||
In its 2006 final judgment and remedial order, the court determined that the defendants, including Lorillard Tobacco, violated certain provisions of the RICO statute, that there was a likelihood of present and future RICO violations, and that equitable relief was warranted. The government was not awarded monetary damages. The equitable relief included permanent injunctions that prohibit the defendants, including Lorillard Tobacco, from engaging in any act of racketeering, as defined under RICO; from making any material false or deceptive statements concerning cigarettes; from making any express or implied statement about health on cigarette packaging or promotional materials (these prohibitions include a ban on using such descriptors as “low tar,” “light,” “ultra- light,” “mild” or “natural”); from making any statements that “low tar,” “light,” “ultra-light,” “mild” or “natural” or low-nicotine cigarettes may result in a reduced risk of disease; and from participating in the management or control of certain entities or their successors. The final judgment and remedial order also requires the defendants, including Lorillard Tobacco, to make corrective statements on their websites, in certain media, in point-of-sale advertisements, and on cigarette package “onserts” concerning: the health effects of smoking; the addictiveness of smoking; that there are no significant health benefits to be gained by smoking “low tar,” “light,” “ultra-light,” “mild” or “natural” cigarettes; that cigarette design has been manipulated to ensure optimum nicotine delivery to smokers; and that there are adverse effects from exposure to secondhand smoke. Lorillard Tobacco accrued estimated costs of approximately $20 million in the first quarter of 2013 to comply with the final judgment and remedial order, which was recorded as a charge to selling, general and administrative expenses in 2013. The final judgment and remedial order also requires defendants, including Lorillard Tobacco, to make disclosures of disaggregated marketing data to the government, and to make document disclosures on a website and in a physical depository. The final judgment and remedial order prohibits each defendant that manufactures cigarettes, including Lorillard Tobacco, from selling any of its cigarette brands or certain elements of its business unless certain conditions are met. | |||||
The final judgment and remedial order has not yet been fully implemented. Following trial, the final judgment and remedial order was stayed because the defendants, the government and several intervenors noticed appeals to the U.S Court of Appeals for the District of Columbia Circuit. In May 2009, a three judge panel upheld substantially all of the District Court’s final judgment and remedial order. In September 2009, the Court of Appeals denied defendants’ rehearing petitions as well as their motion to vacate those statements in the appellate ruling that address defendants’ marketing of “low tar” or “lights” cigarettes, to vacate those parts of the trial court’s judgment on that issue, and to remand the case with instructions to deny as moot the government’s allegations and requested relief regarding “lights” cigarettes. The Court of Appeals stayed its order that formally relinquished jurisdiction of defendants’ appeal pending the disposition of the petitions for writ of certiorari to the U.S. Supreme Court that were noticed by the defendants, the government and the intervenors. In June 2010, the U.S. Supreme Court denied all of the petitions for writ of certiorari. The case has been returned to the trial court for implementation of the Court of Appeals’ directions in its 2009 ruling and for entry of an amended final judgment. On November 27, 2012, the court entered an order prescribing the language the defendants must include in the corrective statements defendants are to make on their websites and through other media. The court directed the parties to engage in discussions to implement the publication of those statements. On January 25, 2013, defendants appealed the court’s November 27, 2012 order to the U.S. Court of Appeals for the District of Columbia Circuit. On February 25, 2013, the Court of Appeals granted defendants’ unopposed motion to hold the appeal in abeyance pending the district court’s resolution of the issues regarding the implementation of the corrective statements. On January 10, 2014, the parties filed a joint motion requesting that the district court enter a consent order addressing the implementation of the corrective statements remedy. The proposed consent order does not resolve outstanding issues as to corrective statements in retail point-of-sale displays, and it expressly reserves defendants’ right to appeal the district court’s November 27, 2012, order concerning the language of the corrective statements. If the district court enters the proposed consent order, implementation of the corrective statements remedy will not begin until that appeal has been resolved. As of February 14, 2014, the district court had not ruled on the joint motion for consent order or entered an amended final judgment. | |||||
While trial was underway, the Court of Appeals ruled that plaintiff may not seek to recover profits earned by the defendants. Prior to trial, the government had asserted that it was entitled to approximately $280 billion from the defendants for its claim to recover profits earned by the defendants. The U.S. Supreme Court declined to address the decisions dismissing recovery of profits when it denied review of the government’s and the intervenors’ petitions in June 2010, which effectively disposed of the claim to recover profits in this case. | |||||
Settlement of State Reimbursement Litigation. On November 23, 1998, Lorillard Tobacco, Philip Morris Incorporated, Brown & Williamson Tobacco Corporation and R.J. Reynolds Tobacco Company (the “Original Participating Manufacturers”) entered into the Master Settlement Agreement (“MSA”) with 46 states, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the U.S. Virgin Islands, American Samoa and the Commonwealth of the Northern Mariana Islands to settle the asserted and unasserted health care cost recovery and certain other claims of those states. These settling entities are generally referred to as the “Settling States.” The Original Participating Manufacturers had previously settled similar claims brought by Mississippi, Florida, Texas and Minnesota, which together with the MSA are referred to as the “State Settlement Agreements.” | |||||
The State Settlement Agreements provide that the agreements are not admissions, concessions or evidence of any liability or wrongdoing on the part of any party, and were entered into by the Original Participating Manufacturers to avoid the further expense, inconvenience, burden and uncertainty of litigation. Lorillard recorded pretax charges for its obligations under the State Settlement Agreements of $1.379 billion and $1.241 billion for the years ended December 31, 2012 and 2013, respectively. Lorillard’s portion of ongoing adjusted settlement payments and legal fees is based on its share of domestic cigarette shipments in the year preceding that in which the payment is due. Accordingly, Lorillard records its portions of ongoing adjusted settlement payments as part of cost of manufactured products sold as the related sales occur. | |||||
The State Settlement Agreements require that the domestic tobacco industry make annual payments of $10.4 billion, subject to adjustment for several factors, including inflation, market share and industry volume. In addition, the domestic tobacco industry is required to pay settling plaintiffs’ attorneys’ fees, subject to an annual cap of $500 million, and was required to pay an additional amount of up to $125 million in each year through 2008. These payment obligations are the several and not joint obligations of each settling defendant. The State Settlement Agreements also include provisions relating to significant advertising and marketing restrictions, public disclosure of certain industry documents, limitations on challenges to tobacco control and underage use laws, and other provisions. | |||||
Lorillard Tobacco, the other Original Participating Manufacturers and other subsequent participating manufacturers (collectively, the “Participating Manufacturers”) are seeking from the Settling States an adjustment in the amount of payments for 2003 and subsequent years pursuant to a provision in the MSA that permits such adjustment if it is determined that the MSA was a significant factor in their loss of market share to companies not participating in the MSA and that the Settling States failed to diligently enforce certain statutes passed in connection with the MSA. If the Participating Manufacturers are ultimately successful, any recovery would be in the form of reimbursement of proceeds already paid or as a credit against future payments by the Participating Manufacturers. | |||||
On December 17, 2012, the Participating Manufacturers, including Lorillard Tobacco, agreed to settle with 17 states and the District of Columbia and Puerto Rico disputes under the MSA involving payment adjustments relating to nonparticipating manufacturers. The Participating Manufacturers presented the settlement to the arbitration panel responsible for adjudicating the 2003 non-participating manufacturer (“NPM”) adjustment dispute with a request that the panel enter it as a partial settlement and award. On March 12, 2013, the arbitration panel issued a Stipulated Partial Settlement and Award that directed the Independent Auditor under the MSA to implement the settlement provisions involved, thereby allowing the settlement to proceed. Since the panel’s ruling, one additional state joined the settlement on April 12, 2013 and two additional states joined the settlement on May 24, 2013. | |||||
The settlement resolves the claims for the years 2003 through 2012 and puts in place a new method for calculating this adjustment beginning in 2013. Under the terms of the settlement, Lorillard and other manufacturers will receive credits against their future MSA payments over five years, and the signatory states will be entitled to receive their allocable share of the amounts currently being held in escrow resulting from these disputes. Lorillard currently expects to receive credits over five years of approximately $220 million on its outstanding claims, with $164 million having occurred in April 2013 and the remainder over the following four years. The estimate is subject to change depending upon a number of factors included in the calculation of the credit. | |||||
Based on the terms of the settlement, during the first quarter of 2013 Lorillard Tobacco recorded a reduction in its State Settlements liability and expense of $165 million and reduced its April 15, 2013 MSA Annual Payment by the same amount. The reduction was partially offset by an increase of $21 million in the State Settlements liability and expense related to the industry Volume Adjustment Offset associated with the increase in the industry aggregate operating income under the agreements with the previously settled states. During the second quarter of 2013 Lorillard Tobacco recorded a reduction in its State Settlements liability and expense of $12 million as a result of the two additional states joining the settlement. The reduction was partially offset by an increase of $1 million in the State Settlements liability and expense related to the industry Volume Adjustment Offset associated with the increase in the industry aggregate operating income under agreements with the previously settled states. | |||||
Lorillard will continue to pursue these claims against those states that have not settled. Fourteen states that have not joined the settlement have taken action in state court to prevent the settlement from proceeding or to seek other relief related to the settlement. As of February 14, 2014, claims in only thirteen states remain pending as one state withdrew its opposition. Two of the thirteen states also unsuccessfully sought to preliminarily enjoin the implementation of the award. There is no assurance that such attempts will be resolved favorably to the Company. | |||||
On September 11, 2013, the arbitration panel responsible for adjudicating the 2003 NPM adjustment dispute issued a determination that six states failed to diligently enforce escrow provisions applicable to non-participating manufacturers. The six non-diligent states included Indiana, Kentucky, Missouri, New Mexico, Maryland, and Pennsylvania. Nine other states that did not participate in the settlement were considered by the arbitration panel because the OPMs contested their diligence as well. The arbitration panel found those nine states diligent. As a result of the panel’s ruling, the OPMs are entitled to receive $458 million, plus interest and earnings, with Lorillard’s share of the principal amount totaling $47 million. If the award is ultimately upheld after any state court challenges, the non-diligent states will receive reductions in future MSA payments they receive, and the OPMs and states found diligent will be entitled to receive amounts due to them through payments from the Disputed Payments Account and/or adjustments associated with future payments. No amount has been recorded in Lorillard’s financial statements related to this award because the six states found non-diligent by the arbitration panel have contested the arbitration panel’s findings in their individual state MSA courts, and, as a result, it is uncertain this award will be realized. | |||||
From time to time, lawsuits have been brought against Lorillard Tobacco and other participating manufacturers to the MSA, or against one or more of the Settling States, challenging the validity of the MSA on certain grounds, including as a violation of the antitrust laws. | |||||
In addition, in connection with the MSA, the Original Participating Manufacturers entered into an agreement to establish a $5.2 billion trust fund payable between 1999 and 2010 to compensate the tobacco growing communities in 14 states (the “Trust”). Payments to the Trust ended in 2005 as a result of an assessment imposed under a federal law, enacted in 2004, repealing the federal supply management program for tobacco growers. Under the law, tobacco quota holders and growers will be compensated over 10 years with payments totaling $10.1 billion, funded by an assessment on tobacco manufacturers and importers. Payments under the law to qualifying tobacco quota holders and growers commenced in 2005 and will be completed in 2014. Lorillard recorded pretax charges for its obligations under the law of $120 million, $118 million and $120 million for the years ended December 31, 2011, 2012 and 2013, respectively. We estimate our remaining cash payments in 2014 under the law will be between $75 million and $80 million. | |||||
Lorillard believes that the State Settlement Agreements will materially adversely affect its cash flows and operating income in future years. The degree of the adverse impact will depend, among other things, on the rates of decline in domestic cigarette sales in the premium price and discount price segments, Lorillard’s share of the domestic premium price and discount price cigarette segments, and the effect of any resulting cost advantage of manufacturers not subject to significant payment obligations under the State Settlement Agreements. | |||||
Filter Cases | |||||
In addition to the above, claims have been brought against Lorillard Tobacco and Lorillard, Inc. by individuals who seek damages resulting from their alleged exposure to asbestos fibers that were incorporated into filter material used in one brand of cigarettes manufactured by a predecessor to Lorillard Tobacco for a limited period of time ending more than 50 years ago. As of February 14, 2014, Lorillard Tobacco was a defendant in 61 Filter Cases. Lorillard, Inc. was a defendant in two Filter Cases, including one that also names Lorillard Tobacco. Since January 1, 2011, Lorillard Tobacco has paid, or has reached agreement to pay, a total of approximately $31.8 million in settlements to finally resolve 128 claims, including the Lenney case, discussed below. The related expense was recorded in selling, general and administrative expenses on the consolidated statements of income. Since January 1, 2011, verdicts have been returned in the following four Filter Cases: Lenney v. Armstrong International, Inc., et al. trial, tried in the Superior Court of California, San Francisco County; McGuire v. Lorillard Tobacco Company and Hollingsworth & Vose Company, tried in the Circuit Court, Division Four, of Jefferson County, Kentucky; Couscouris v. Hatch Grinding Wheels, et al., tried in the Superior Court of the State of California, Los Angeles; and DeLisle v. A.W. Chesterton Company, et al., tried in the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida. Pursuant to the terms of a 1952 agreement between P. Lorillard Company and H&V Specialties Co., Inc. (the manufacturer of the filter material), Lorillard Tobacco is required to indemnify Hollingsworth & Vose for legal fees, expenses, judgments and resolutions in cases and claims alleging injury from finished products sold by P. Lorillard Company that contained the filter material. In the Lenney trial, the jury found in favor of the plaintiffs as to their claims, and the final judgment entered by the trial court in 2011 awarded plaintiffs a total of approximately $1.1 million in compensatory damages, damages for loss of consortium and costs from Lorillard Tobacco and Hollingsworth & Vose. Lorillard Tobacco and Hollingsworth & Vose noticed an appeal to the California Court of Appeals. In 2012, Lorillard Tobacco reached agreement with the plaintiffs to resolve plaintiffs’ pending claims, and any claims they might assert in the future, for an amount that is included in the above total for settlements reached since January 1, 2011. The jury in the McGuire case returned a verdict for Lorillard Tobacco and Hollingsworth & Vose, and the Court entered final judgment in May 2012. On February 14, 2014, the Kentucky Court of Appeals affirmed the final judgment in favor of Lorillard Tobacco and Hollingsworth & Vose. On October 4, 2012, the jury in the Couscouris case returned a verdict for Lorillard Tobacco and Hollingsworth & Vose, and the court entered final judgment on November 1, 2012. On June 17, 2013, the California Court of Appeal for the Second Appellate District entered an order dismissing the appeal of the final judgment pursuant to plaintiffs’ request, but plaintiffs’ appeal of the cost judgment remains pending. On September 13, 2013, the jury in the DeLisle case found in favor of the plaintiffs as to their claims for negligence and strict liability, and awarded $8 million. Lorillard Tobacco Company is responsible for 44%, or $3.52 million. Judgment was entered on November 6, 2013. Lorillard Tobacco Company filed its notice of appeal on January 10, 2014. As of February 14, 2014, 29 Filter Cases were scheduled for trial or have been placed on courts’ trial calendars. Trial dates are subject to change. | |||||
Tobacco-Related Antitrust Cases | |||||
Indirect Purchaser Suits | |||||
Approximately 30 antitrust suits were filed in 2000 and 2001 on behalf of putative classes of consumers in various state and federal courts against cigarette manufacturers. The suits all alleged that the defendants entered into agreements to fix the wholesale prices of cigarettes in violation of state antitrust laws which permit indirect purchasers, such as retailers and consumers, to sue under price fixing or consumer fraud statutes. More than 20 states permit such suits. Lorillard Tobacco was a defendant in all but one of these indirect purchaser cases. Lorillard, Inc. was not named as a defendant in any of these cases. Four indirect purchaser suits, in New York, Florida, New Mexico and Michigan, thereafter were dismissed by courts in those states. All other actions, except for a state court action in Kansas, were either voluntarily dismissed or dismissed by the courts. | |||||
In the Kansas case, the District Court of Seward County certified a class of Kansas indirect purchasers in 2002. In November 2010, defendants filed a motion for summary judgment, and plaintiffs filed a cross motion for summary judgment in July 2011. In March 2012, the District Court of Seward County granted the defendants’ motions for summary judgment dismissing the Kansas suit. Plaintiff’s motion for reconsideration was denied. On July 18, 2012, plaintiff filed a notice of appeal to the Court of Appeals for the State of Kansas. Briefing on plaintiff’s appeal was completed and argument in the Court of Appeals was held on December 11, 2013. As of February 14, 2014, the Court of Appeals had not ruled on this appeal. | |||||
Defenses | |||||
Each of Lorillard Tobacco and Lorillard, Inc. believes that it has valid defenses to the cases pending against it as well as valid bases for appeal should any adverse verdicts be returned against either of them. While Lorillard Tobacco and Lorillard, Inc. intend to defend vigorously all tobacco products liability litigation, it is not possible to predict the outcome of any of this litigation. Litigation is subject to many uncertainties. Plaintiffs have prevailed in several cases, as noted above. It is possible that one or more of the pending actions could be decided unfavorably as to Lorillard Tobacco, Lorillard, Inc. or the other defendants. Lorillard Tobacco and Lorillard, Inc. may enter into discussions in an attempt to settle particular cases if either believe it is appropriate to do so. | |||||
Neither Lorillard Tobacco nor Lorillard, Inc. can predict the outcome of pending litigation. Some plaintiffs have been awarded damages from cigarette manufacturers at trial. While some of these awards have been overturned or reduced, other damages awards have been paid after the manufacturers have exhausted their appeals. These awards and other litigation activities against cigarette manufacturers continue to receive media attention. In addition, health issues related to tobacco products also continue to receive media attention. It is possible, for example, that the 2006 verdict in United States of America v. Philip Morris USA, Inc., et al., which made many adverse findings regarding the conduct of the defendants, including Lorillard Tobacco, could form the basis of allegations by other plaintiffs or additional judicial findings against cigarette manufacturers. Any such developments could have an adverse effect on the ability of Lorillard Tobacco or Lorillard, Inc. to prevail in smoking and health litigation and could influence the filing of new suits against Lorillard Tobacco or Lorillard, Inc. Lorillard Tobacco and Lorillard, Inc. also cannot predict the type or extent of litigation that could be brought against either of them, or against other cigarette manufacturers, in the future. | |||||
Indemnification Obligations | |||||
In connection with the Separation, Lorillard entered into a separation agreement with Loews (the “Separation Agreement”) and agreed to indemnify Loews and its officers, directors, employees and agents against all costs and expenses arising out of third party claims (including, without limitation, attorneys’ fees, interest, penalties and costs of investigation or preparation for defense), judgments, fines, losses, claims, damages, liabilities, taxes, demands, assessments and amounts paid in settlement based on, arising out of or resulting from, among other things, Loews’s ownership of or the operation of Lorillard and its assets and properties, and its operation or conduct of its businesses at any time prior to or following the Separation (including with respect to any product liability claims). | |||||
Loews is a defendant in three pending product liability cases, each of which are purported Class Action Cases. Pursuant to the Separation Agreement, Lorillard is required to indemnify Loews for the amount of any losses and any legal or other fees with respect to such cases. | |||||
Other Litigation | |||||
Lorillard is also party to other litigation arising in the ordinary course of business. The outcome of this other litigation will not, in the opinion of management, materially affect Lorillard’s results of operations or equity. |
SCHEDULE_II_VALUATION_AND_QUAL
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS OF LORILLARD, INC. AND SUBSIDIARIES | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS OF LORILLARD, INC. AND SUBSIDIARIES | ' | ||||||||||||||||||||
SCHEDULE II | |||||||||||||||||||||
VALUATION AND QUALIFYING ACCOUNTS OF LORILLARD, INC. AND SUBSIDIARIES | |||||||||||||||||||||
Column A | Column B | Column C | Column D | Column E | |||||||||||||||||
Additions | |||||||||||||||||||||
Description | Balance at | Charged to | Charged | Deductions (1) | Balance at | ||||||||||||||||
Beginning | Costs and | to Other | End of | ||||||||||||||||||
of Period | Expenses | Accounts | Period | ||||||||||||||||||
(In millions) | |||||||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||||||
Deducted from assets: | |||||||||||||||||||||
Allowance for discounts | $ | 1 | $ | 203 | $ | — | $ | 203 | $ | 1 | |||||||||||
Allowance for doubtful accounts | 2 | — | — | — | 2 | ||||||||||||||||
Total | $ | 3 | $ | 203 | $ | — | $ | 203 | $ | 3 | |||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||||||||
Deducted from assets: | |||||||||||||||||||||
Allowance for discounts | $ | 1 | $ | 198 | $ | — | $ | 198 | $ | 11 | |||||||||||
Allowance for doubtful accounts | 1 | 1 | — | — | 2 | ||||||||||||||||
Total | $ | 2 | $ | 199 | $ | — | $ | 198 | $ | 3 | |||||||||||
For the Year Ended December 31, 2011 | |||||||||||||||||||||
Deducted from assets: | |||||||||||||||||||||
Allowance for discounts | $ | 1 | $ | 193 | $ | — | $ | 193 | $ | 1 | |||||||||||
Allowance for doubtful accounts | 2 | — | — | 1 | 1 | ||||||||||||||||
Total | $ | 3 | $ | 193 | $ | — | $ | 194 | $ | 2 | |||||||||||
-1 | Discounts allowed. |
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2013 | |
Basis of presentation | ' |
Basis of presentation—Lorillard, Inc., through its subsidiaries, is engaged in the manufacture and sale of cigarettes and electronic cigarettes. Its principal products are marketed under the brand names of Newport, Kent, True, Maverick and Old Gold with substantially all of its sales in the United States of America. On April 24, 2012 Lorillard acquired blu eCigs, an electronic cigarette brand in the US. On October 1, 2013, Lorillard acquired SKYCIG, a United Kingdom-based electronic cigarette business. Newport, Kent, True, Maverick, Old Gold, blu eCigs and SKYCIG are the registered trademarks of Lorillard, Inc. and its subsidiaries. | |
The consolidated financial statements of Lorillard, Inc. (the “Company”), together with its subsidiaries (“Lorillard” or “we” or “us” or “our”), include the accounts of the Company and its subsidiaries after the elimination of intercompany accounts and transactions. | |
The Company has two reportable segments – Cigarettes and Electronic Cigarettes. The Cigarettes segment consists principally of the operations of Lorillard Tobacco Company (“Lorillard Tobacco” or “Issuer”) and related entities. The Electronic Cigarettes segment consists of the operations of LOEC, Inc. (d/b/a blu eCigs), (“LOEC” or “blu eCigs”), Cygnet UK Trading Limited (t/a SKYCIG) (“Cygnet” or “SKYCIG”) and related entities. | |
Use of estimates | ' |
Use of estimates—The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and related notes. Significant estimates in the consolidated financial statements and related notes include: (1) accruals for tobacco settlement costs, litigation, sales incentive programs, income taxes and share-based compensation, (2) the determination of discount and other rate assumptions for defined benefit pension and other postretirement benefit expenses, (3) the valuation of pension assets and (4) the valuation of goodwill and intangible assets. Actual results could differ from those estimates. | |
Cash equivalents | ' |
Cash equivalents—Cash equivalents consist of short-term liquid investments with a maturity at date of purchase of 90 days or less. Interest and dividend income are included in investment income. | |
Short-term and Long-term Investments | ' |
Short-term and Long-term Investments—Our short-term and long-term investments consist of investment grade debt securities, all of which are classified as available for sale. Available for sale securities are recorded at fair value, and unrealized holding gains and losses are recorded, net of tax, as a component of accumulated other comprehensive income. Available for sale securities with remaining maturities of less than one year and those identified by management at the time of purchase to be used to fund operations within one year are classified as short-term. All other available for sale securities are classified as long-term. Unrealized losses are charged against net earnings when a decline in fair value is determined to be other than temporary. We review several factors to determine whether a loss is other than temporary, such as the length and extent of the fair value decline, the financial condition and near term prospects of the issuer, and whether we have the intent to sell or will likely be required to sell before the anticipated recovery of the securities, which may be at maturity. Realized gains and losses are accounted for using the specific identification method, and are recorded as a component of investment income in the accompanying consolidated statements of income. Purchases and sales are recorded on a trade date basis. | |
Inventories | ' |
Inventories—Cigarette inventories (including leaf tobacco, manufactured stock and materials and supplies) are valued at the lower of cost, determined on a last-in, first-out (“LIFO”) basis, or market. A significant portion of leaf tobacco on hand will not be sold or used within one year, due to the duration of the aging process. All inventory of leaf tobacco, including the portion that has an operating cycle that exceeds 12 months, is classified as a current asset as is a generally recognized trade practice. Electronic cigarette inventories are valued at the lower of cost, determined on a first-in, first-out (“FIFO”) basis, or market and are included in manufactured stock. | |
Depreciation | ' |
Depreciation—Buildings, machinery and equipment are depreciated for financial reporting purposes on the straight-line method over estimated useful lives of those assets of 40 years for buildings and 3 to 12 years for machinery and equipment. | |
Derivative agreements | ' |
Derivative agreements—In September 2009, Lorillard Tobacco entered into interest rate swap agreements, which the Company guaranteed, with a total notional amount of $750 million. The interest rate swap agreements qualify for hedge accounting and were designated as fair value hedges. Under the swap agreements, Lorillard Tobacco receives a fixed rate settlement and pays a variable rate settlement with the difference recorded in interest expense. Changes in the fair value of the swap agreements are recorded in other assets or other liabilities with an offsetting adjustment to the carrying amount of the hedged debt. See Notes 10 and 13. | |
Business Combinations | ' |
Business Combinations—Lorillard utilizes the acquisition method in accounting for business combinations whereby the amount of purchase price that exceeds the fair value of the acquired assets and assumed liabilities is allocated to goodwill. Lorillard recognizes intangible assets apart from goodwill if they arise from contractual or other legal rights, or if they are capable of being separated or divided from the acquired entity and sold, transferred, licensed, rented or exchanged. Assumptions and estimates are used in determining the fair value of assets acquired and liabilities assumed in a business combination. Valuation of intangible assets acquired requires that we use significant judgment in determining fair value, whether such intangibles are amortizable and, if the asset is amortizable, the period and the method by which the intangible asset will be amortized. On April 24, 2012, the Company acquired blu eCigs and other assets used in the manufacture, distribution, development, research, marketing, advertising, and sale of electronic cigarettes. On October 1, 2013, the Company acquired certain of the assets and operations of SKYCIG, a United Kingdom based electronic cigarette business. Changes in the initial assumptions could lead to changes in amortization or impairment charges recorded in our consolidated financial statements. With regard to the SKYCIG acquisition, estimates for the preliminary purchase price and the preliminary purchase price allocation may change as subsequent information becomes available. See Notes 2 and 6 to the Consolidated Financial Statements for additional disclosure about the acquisitions and the purchase price allocations. | |
Goodwill and Intangible Assets | ' |
Goodwill and Intangible Assets—Goodwill is evaluated using a two-step impairment test at the reporting unit level. The first step of the goodwill impairment test compares the book value of a reporting unit, including goodwill, with its fair value. If the book value of a reporting unit exceeds its fair value, we perform the second step of the impairment test. In the second step, we estimate an implied fair value of the reporting unit’s goodwill by allocating the fair value of the reporting unit to all of the assets and liabilities other than goodwill. The difference between the total fair value of the reporting unit and the fair value of all of the assets and liabilities other than goodwill is the implied fair value of that goodwill. The amount of impairment loss is equal to the excess of the book value of the goodwill over the implied fair value of that goodwill. | |
The fair value of our indefinite lived trademark and trade name are estimated utilizing the relief from royalty method, and compared to the carrying value. The main assumptions utilized in the relief from royalty method are projected revenues from our long range plan, assumed royalty rates that could be payable if we did not own the trademarks and a discount rate. We recognize an impairment loss when the estimated fair value of the indefinite lived intangible asset is less than its carrying value. | |
Accumulated other comprehensive income (loss) | ' |
Accumulated other comprehensive income (loss)—The components of accumulated other comprehensive income (loss) (“AOCI”) are unamortized actuarial gains and losses and prior service costs related to Lorillard’s defined benefit pension and postretirement plans, unrealized holding gains and losses on our investments and foreign currency translation adjustments. The unamortized actuarial gains and losses and prior service costs are recognized in net periodic benefit costs over the estimated service lives of covered employees. | |
Foreign Currency Translation | ' |
Foreign Currency Translation—Foreign currency denominated assets and liabilities are translated into United States dollars at exchange rates existing at the respective balance sheet dates. Translation adjustments resulting from fluctuations in exchange rates are recorded as a separate component of other comprehensive income (loss) within stockholders’ equity. The results of operations of foreign subsidiaries are translated at the average exchange rates during the respective periods. Gains and losses resulting from foreign currency transactions are included in net earnings. | |
Revenue recognition | ' |
Revenue recognition—Revenue from product sales, net of sales incentives, is recognized at the time ownership of the goods transfers to customers and collectability is reasonably assured. Federal excise taxes are recognized on a gross basis, and are reflected in both net sales and cost of sales. Sales incentives include retail price discounts, coupons and retail display allowances and are recorded as a reduction of revenue based on amounts estimated as due to customers and consumers at the end of a period based primarily on use and redemption rates. Sales to one customer represented 29%, 29%, and 28% of Lorillard’s revenues in 2013, 2012 and 2011, respectively. Our largest selling brand, Newport, accounted for approximately 85.4%, 87.0%, and 88.4% of consolidated net sales of Lorillard in 2013, 2012, and 2011, respectively. | |
Cost of sales | ' |
Cost of sales—Cost of sales includes federal excise taxes, leaf tobacco cost, wrapping and casing material, manufacturing labor and production salaries, wages and overhead, research and development costs, distribution, other manufacturing costs, State Settlement Agreement expenses, the federal assessment for tobacco growers, Food and Drug Administration fees, promotional product expenses and electronic cigarette raw materials and manufacturing costs. Promotional product expenses include the cost, including excise taxes, of the free portion of “buy some get some free” promotions. We purchased approximately 86%, 90% and 88% of our leaf tobacco through a limited number of suppliers in 2013, 2012 and 2011, respectively. | |
Advertising and marketing costs | ' |
Advertising and marketing costs—Advertising costs are recorded as expense in the year incurred. Marketing and advertising costs that include such items as direct mail, advertising, agency fees and point of sale materials are included in selling, general and administrative expenses. Advertising expense was $84 million $54 million and $41 million for the years ended December 31, 2013, 2012, and 2011, respectively. | |
Research and development costs | ' |
Research and development costs—Research and development costs are recorded as expense as incurred, are included in cost of sales and amounted to $21 million $20 million, and $22 million for each of the years ended December 31, 2013, 2012, and 2011, respectively. | |
Tobacco settlement costs | ' |
Tobacco settlement costs—Lorillard recorded pre-tax charges of $1.241 billion, $1.379 billion, and $1.307 billion for the years ended December 31, 2013, 2012, and 2011, respectively, to accrue its obligations under the State Settlement Agreements (see Note 23). Lorillard’s portion of ongoing adjusted settlement payments and legal fees is based on its share of total domestic cigarette shipments in that year. Accordingly, Lorillard records its portion of ongoing adjusted settlement payments as part of cost of sales as the related sales occur. Payments are made annually and are generally due in April of the year following the accrual of costs. The settlement cost liability on the balance sheets represents the unpaid portion of the Company’s obligations under the State Settlement Agreements. | |
Share-Based compensation costs | ' |
Share-Based compensation costs—Under the 2008 Incentive Compensation Plan, the fair market value of the restricted shares and restricted stock units and the exercise price of stock options is based on the closing price at the date of the grant. Share-based compensation expense is recognized net of an estimated forfeiture rate and for shares expected to vest, using a straight-line basis over the requisite service period of the award. | |
Legal costs and loss contingencies | ' |
Legal costs and loss contingencies—Legal costs are expensed as incurred and amounted to $146 million, $160 million and $140 million for the years ended December 31, 2013, 2012, and 2011, respectively. Lorillard establishes accruals in accordance with Accounting Standards Codification Topic 450, Contingencies (“ASC 450”), when a loss contingency is both probable and can be reasonably estimated as a charge to selling, general and administrative expense. There are a number of factors impacting Lorillard’s ability to estimate the possible loss or a range of loss, including the specific facts of each matter; the legal theories proffered by plaintiffs and legal defenses available to Lorillard Tobacco and Lorillard, Inc.; the wide-ranging outcomes reached in similar cases; differing procedural and substantive laws in the various jurisdictions in which lawsuits have been filed, including whether punitive damages may be pursued or are permissible; the degree of specificity in a plaintiff’s complaint; the history of the case and whether discovery has been completed; plaintiffs’ history of use of Lorillard Tobacco’s cigarettes relative to those of the other defendants; the attribution of damages, if any, among multiple defendants; the application of contributory and/or comparative negligence to the allocation of damage awards among plaintiffs and defendants; the likelihood of settlements for de minimis amounts prior to trial; the likelihood of success at trial; the likelihood of success on appeal; and the impact of current and pending state and federal appellate decisions. It has been Lorillard’s experience and is its continued expectation that the above complexities and uncertainties will not be clarified until the late stages of litigation. For those reasonably possible loss contingencies for which an estimate of the possible loss or range of loss cannot be made, Lorillard discloses the nature of the litigation and any developments as appropriate. See Note 23 for a description of loss contingencies. | |
Income taxes | ' |
Income taxes—Deferred tax assets and liabilities are determined based on the differences between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Judgment is required in determining income tax provisions and in evaluating tax positions. For uncertain tax positions to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Where applicable, interest related to uncertain tax positions is recognized in interest expense. Penalties, if incurred, are recognized as a component of income tax expense. Accrued interest and penalties are recorded as a component of other liabilities in the accompanying consolidated balance sheets. | |
Recently adopted accounting pronouncements | ' |
Recently adopted accounting pronouncements—Lorillard adopted ASU 2011-04 “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS.” ASU 2011-04 clarifies certain areas of the fair value guidance, including application of the highest and best use and valuation premise concepts, measuring the fair value of an instrument classified in a reporting entity’s shareholders’ equity, and quantitative information about unobservable inputs used in a Level 3 fair value measurement. Additionally, ASU 2011-04 contains guidance on measuring the fair value of instruments that are managed within a portfolio, application of premiums and discounts in a fair value measurement, and requires additional disclosures about fair value measurements. The amendments contained in ASU 2011-04 are to be applied prospectively, and ASU 2011-04 is effective for public companies for interim and annual periods beginning after December 15, 2011. ASU 2011-04 did not have a material impact on Lorillard’s financial position or results of operations. | |
Lorillard adopted ASU 2011-05 “Comprehensive Income (Topic 220): Presentation of Comprehensive Income.” ASU 2011-05 requires presentation of comprehensive income in either a single statement of comprehensive income or two separate but consecutive statements. ASU 2011-05 does not change the definitions or the components of net income and other comprehensive income (OCI), when an item must be reclassified from OCI to net income, or the calculation or presentation of earnings per share. The entity still has the choice to either present OCI components before tax with one line amount for tax, or net of taxes. Disclosure of the tax impact for each OCI component is still required. ASU 2011-05 is effective for public companies for reporting periods beginning after December 15, 2011 and must be applied retrospectively. ASU 2011-05 did not have any impact on Lorillard’s financial position or results of operations, but resulted in the presentation of a separate statement of other comprehensive income. | |
In September 2011, the FASB issued ASU 2011-08 “Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment.” ASU 2011-08 gives an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity determines that it is not more likely than not, then performing a two-step impairment test of goodwill is not necessary. ASU 2011-08 is effective for public companies for reporting periods beginning after December 15, 2011. The adoption of ASU 2011-08 did not have a material impact on Lorillard’s financial position or results of operations, but may impact the manner in which Lorillard assesses goodwill for impairment. | |
In July 2012, the FASB issued ASU 2012-02 “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Asset for Impairment.” ASU 2012-02 gives an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances indicates that it is more likely than not that indefinite-lived intangible assets other than goodwill are impaired, before being required to complete a quantitative impairment test. If an entity concludes, after assessing the totality of qualitative factors, that it is more likely than not that the indefinite-lived intangible assets are not impaired, then it is not required to complete a quantitative impairment test whereby the fair value of the indefinite-lived intangible asset would be determined and compared with the carrying amount of the intangible asset. The amendments in this update are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, and early adoption is permitted. The adoption of ASU 2012-02 in the first quarter of 2013 did not have a material impact on Lorillard’s financial position or results of operations, but may impact the manner in which Lorillard assesses indefinite-lived intangible assets for impairment. | |
In February 2013, the FASB issued ASU 2013-02 “Comprehensive Income (Topic 220) – Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income.” ASU 2013-02 requires an entity to provide information about amounts reclassified out of accumulated other comprehensive income. An entity is also required to present either on the face of the financial statements or in the footnotes, significant items reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety. For other items that are not required under U.S. GAAP to be reclassified to net income in their entirety, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. This standard is effective for public entities prospectively for reporting periods beginning after December 15, 2012. The adoption of ASU 2013-02 did not have any impact on Lorillard’s financial position or results of operations, but resulted in disclosure of additional information about amounts reclassified out of accumulated other comprehensive income. For additional information, see Note 19, “Accumulated Other Comprehensive Loss.” |
Acquisitions_Tables
Acquisitions (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Blu eCigs | ' | ||||
Fair Values of Assets Acquired and Liabilities Assumed | ' | ||||
The fair values of the assets acquired and liabilities assumed at the date of acquisition are summarized below (in millions): | |||||
Assets acquired: | |||||
Current assets: | |||||
Accounts receivable | $ | 2 | |||
Inventories | 15 | ||||
Total current assets | 17 | ||||
Goodwill | 64 | ||||
Intangible assets | 58 | ||||
Total assets | 139 | ||||
Liabilities assumed: | |||||
Current liabilities: | |||||
Accounts and drafts payable | 4 | ||||
Purchase price | $ | 135 | |||
SKYCIG | ' | ||||
Fair Values of Assets Acquired and Liabilities Assumed | ' | ||||
The fair values of the assets acquired and liabilities assumed at the date of acquisition are summarized below (in millions): | |||||
Assets acquired: | |||||
Current assets: | |||||
Accounts receivable | $ | 2 | |||
Goodwill | 38 | ||||
Intangible assets | 35 | ||||
Total assets | 75 | ||||
Liabilities assumed: | |||||
Current liabilities: | |||||
Accounts and drafts payable | 3 | ||||
Accrued liabilities | 1 | ||||
Total current liabilities | 4 | ||||
Earn out liability | 25 | ||||
Purchase price | $ | 46 | |||
Inventories_Tables
Inventories (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Inventories | ' | ||||||||
Inventories consisted of the following: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(In millions) | |||||||||
Leaf tobacco | $ | 349 | $ | 311 | |||||
Manufactured stock | 143 | 94 | |||||||
Materials and supplies | 7 | 5 | |||||||
$ | 499 | $ | 410 | ||||||
Other_Current_Assets_Tables
Other Current Assets (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Current Assets | ' | ||||||||
Other current assets were as follows: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(In millions) | |||||||||
Appeal bonds | $ | 7 | $ | 7 | |||||
Deposits | 2 | 7 | |||||||
Other current assets | 14 | 6 | |||||||
Total | $ | 23 | $ | 20 | |||||
Plant_and_Equipment_Net_Tables
Plant and Equipment, Net (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Plant and Equipment Stated at Historical Cost | ' | ||||||||
Plant and equipment is stated at historical cost and consisted of the following: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(In millions) | |||||||||
Land | $ | 3 | $ | 3 | |||||
Buildings | 104 | 95 | |||||||
Equipment | 684 | 657 | |||||||
Total | 791 | 755 | |||||||
Accumulated depreciation | (475 | ) | (457 | ) | |||||
Plant and equipment, net | $ | 316 | $ | 298 | |||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 12 Months Ended | ||||||||||||||
Dec. 31, 2013 | |||||||||||||||
Goodwill | ' | ||||||||||||||
Goodwill and the changes in goodwill during the period are as follows: | |||||||||||||||
(In millions) | Total | ||||||||||||||
Balance, December 2012 | $ | 64 | |||||||||||||
Purchase of SKYCIG | 38 | ||||||||||||||
Balance, December 2013 | $ | 102 | |||||||||||||
Intangible Assets | ' | ||||||||||||||
Intangible Assets | |||||||||||||||
Weighted | Cost | Accumulated | Net | ||||||||||||
Average | Amortization | Carrying | |||||||||||||
Amortization | Amount | ||||||||||||||
Period | |||||||||||||||
(Dollars in millions) | |||||||||||||||
Amortizable intangible assets: | |||||||||||||||
blu eCigs Non-compete Agreement and Technology | 5 years | $ | 1 | $ | 1 | $ | — | ||||||||
SKYCIG Non-compete Agreement and Customer List | 5 years | 2 | — | 2 | |||||||||||
SKYCIG trademark and trade name | 18 months | 34 | 6 | 28 | |||||||||||
Amortizable intangible assets, net | 30 | ||||||||||||||
Indefinite-lived intangible assets: | |||||||||||||||
blu eCigs trademark and trade name | 57 | ||||||||||||||
Intangible assets, net | $ | 87 | |||||||||||||
Other_Assets_Tables
Other Assets (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Assets | ' | ||||||||
Other assets were as follows: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(In millions) | |||||||||
Debt issuance costs, net | $ | 26 | $ | 26 | |||||
Interest rate swap | 60 | 111 | |||||||
Prepaid pension | 55 | — | |||||||
Other prepaid assets | 10 | 15 | |||||||
Total | $ | 151 | $ | 152 | |||||
Accrued_Liabilities_Tables
Accrued Liabilities (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accrued Liabilities | ' | ||||||||
Accrued liabilities were as follows: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(In millions) | |||||||||
Legal fees | $ | 29 | $ | 23 | |||||
Salaries and other compensation | 20 | 19 | |||||||
Medical and other employee benefit plans | 30 | 33 | |||||||
Consumer rebates | 78 | 87 | |||||||
Sales promotion | 29 | 26 | |||||||
Accrued vendor charges | 3 | 19 | |||||||
Excise and other taxes | 57 | 63 | |||||||
Accrued interest | 34 | 33 | |||||||
Litigation related accruals | 42 | — | |||||||
Other accrued liabilities | 55 | 53 | |||||||
Total | $ | 377 | $ | 356 | |||||
Commitments_Tables
Commitments (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Future Minimum Rental Payments | ' | ||||
Listed below are future minimum rental payments required under those operating leases with non-cancelable terms in excess of one year. | |||||
December 31, 2013 | |||||
(In millions) | |||||
2014 | $ | 2.3 | |||
2015 | 1.7 | ||||
2016 | 0.8 | ||||
2017 | 0.5 | ||||
2018 | 0.5 | ||||
2019 | 0.2 | ||||
Net Minimum lease payments | $ | 6 | |||
Fair_Value_Tables
Fair Value (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Assets and Liabilities Measured at Fair Value on Recurring Basis | ' | ||||||||||||||||
Assets and liabilities measured at fair value on a recurring basis at December 31, 2013 were as follows: | |||||||||||||||||
(In millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash and Cash Equivalents: | |||||||||||||||||
Prime money market funds | $ | 1,454 | $ | — | $ | — | $ | 1,454 | |||||||||
Total cash and cash equivalents | $ | 1,454 | $ | — | $ | — | $ | 1,454 | |||||||||
Short-term investments: | |||||||||||||||||
Corporate debt securities | $ | — | $ | 63 | $ | — | $ | 63 | |||||||||
U.S. Government agency obligations | — | 59 | — | 59 | |||||||||||||
Commercial paper | — | 22 | — | 22 | |||||||||||||
International government obligations | — | 13 | — | 13 | |||||||||||||
Total short-term investments | $ | — | $ | 157 | $ | 157 | |||||||||||
Long-term investments: | |||||||||||||||||
Corporate debt securities | $ | — | $ | 86 | $ | — | $ | 86 | |||||||||
U.S. Government agency obligations | — | 7 | — | 7 | |||||||||||||
Total long-term investments | $ | — | $ | 93 | $ | — | $ | 93 | |||||||||
Derivative Asset: | |||||||||||||||||
Interest rate swaps — fixed to floating rate | $ | — | $ | 60 | $ | — | $ | 60 | |||||||||
Other liabilities: | |||||||||||||||||
SKYCIG earn out liability | $ | — | $ | — | $ | 25 | $ | 25 | |||||||||
Assets and liabilities measured at fair value on a recurring basis at December 31, 2012 were as follows: | |||||||||||||||||
(In millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash and Cash Equivalents: | |||||||||||||||||
Prime money market funds | $ | 1,720 | $ | — | $ | — | $ | 1,720 | |||||||||
Total cash and cash equivalents | $ | 1,720 | $ | — | $ | — | $ | 1,720 | |||||||||
Derivative Asset: | |||||||||||||||||
Interest rate swaps — fixed to floating rate | $ | — | $ | 111 | $ | — | $ | 111 | |||||||||
Total derivative asset | $ | — | $ | 111 | $ | — | $ | 111 | |||||||||
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Long-Term Debt, Net of Interest Rate Swaps | ' | ||||||||
Long-term debt, net of interest rate swaps, consisted of the following: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
(In millions) | |||||||||
2016 Notes—3.500% Notes due 2016 | $ | 500 | $ | 500 | |||||
2017 Notes—2.300% Notes due 2017 | 500 | 500 | |||||||
2019 Notes—8.125% Notes due 2019 | 810 | 861 | |||||||
2020 Notes—6.875% Notes due 2020 | 750 | 750 | |||||||
2023 Notes—3.750% Notes due 2023 | 500 | — | |||||||
2040 Notes—8.125% Notes due 2040 | 250 | 250 | |||||||
2041 Notes—7.000% Notes due 2041 | 250 | 250 | |||||||
Total long-term debt | $ | 3,560 | $ | 3,111 | |||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Basic and Diluted Earnings Per Share | ' | ||||||||||||
Basic and diluted earnings per share (“EPS”) were calculated using the following: | |||||||||||||
Year Ended | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
(In millions) | |||||||||||||
Numerator: | |||||||||||||
Net income, as reported | $ | 1,180 | $ | 1,099 | $ | 1,116 | |||||||
Less: Net income attributable to participating securities | (3 | ) | (3 | ) | (3 | ) | |||||||
Net income available to common shareholders | $ | 1,177 | $ | 1,096 | $ | 1,113 | |||||||
Denominator: | |||||||||||||
Basic EPS – weighted average shares | 372.96 | 389.27 | 417.32 | ||||||||||
Effect of dilutive securities: | |||||||||||||
Stock Options and SARS | 0.75 | 0.86 | 0.74 | ||||||||||
Diluted EPS – adjusted weighted average shares and assumed conversions | 373.71 | 390.13 | 418.06 | ||||||||||
Earnings Per Share: | |||||||||||||
Basic | $ | 3.15 | $ | 2.82 | $ | 2.67 | |||||||
Diluted | $ | 3.15 | $ | 2.81 | $ | 2.66 |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Provision (Benefit) for Income Taxes | ' | ||||||||||||
The provision (benefit) for income taxes consisted of the following: | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
(In millions) | |||||||||||||
Current | |||||||||||||
Federal | $ | 606 | $ | 530 | $ | 548 | |||||||
State | 140 | 111 | 120 | ||||||||||
Foreign | — | — | — | ||||||||||
Deferred | |||||||||||||
Federal | (36 | ) | (10 | ) | (10 | ) | |||||||
State | (5 | ) | (2 | ) | (4 | ) | |||||||
Foreign | (1 | ) | — | — | |||||||||
Total | $ | 704 | $ | 629 | $ | 654 | |||||||
Pre-Tax Income (Loss) for Domestic and Foreign Operations | ' | ||||||||||||
Pre-tax income (loss) for domestic and foreign operations is as follows: | |||||||||||||
(In millions) | 2013 | 2012 | 2011 | ||||||||||
Domestic | $ | 1,891 | $ | 1,728 | $ | 1,770 | |||||||
Foreign | (7 | ) | — | — | |||||||||
$ | 1,884 | $ | 1,728 | $ | 1,770 | ||||||||
Reconciliation Between Statutory Federal Income Tax Rate and Effective Income Tax Rate as Percentage of Income | ' | ||||||||||||
A reconciliation between the statutory federal income tax rate and Lorillard’s effective income tax rate as a percentage of income is as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Statutory rate | 35 | % | 35 | % | 35 | % | |||||||
Increase (decrease) in rate resulting from: | |||||||||||||
State taxes | 4.7 | 4.1 | 4.3 | ||||||||||
Domestic manufacturer’s deduction | (2.7 | ) | (2.8 | ) | (2.4 | ) | |||||||
Other | 0.4 | 0.1 | 0.1 | ||||||||||
Effective rate | 37.4 | % | 36.4 | % | 37 | % | |||||||
Deferred Tax Assets (Liabilities) | ' | ||||||||||||
Deferred tax assets (liabilities) are as follows: | |||||||||||||
December 31, | |||||||||||||
(In millions) | 2013 | 2012 | |||||||||||
Deferred tax assets: | |||||||||||||
Employee benefits | $ | 137 | $ | 161 | |||||||||
Settlement costs | 525 | 511 | |||||||||||
State and local income taxes | 22 | 18 | |||||||||||
Litigation and legal | 24 | 6 | |||||||||||
Inventory | 3 | 4 | |||||||||||
Other | 3 | 2 | |||||||||||
Gross deferred tax assets | 714 | 702 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Depreciation | (66 | ) | (63 | ) | |||||||||
Federal effect of state deferred taxes | (42 | ) | (34 | ) | |||||||||
Gross deferred tax liabilities | (108 | ) | (97 | ) | |||||||||
Net deferred tax assets | $ | 606 | $ | 605 | |||||||||
Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | ' | ||||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: | |||||||||||||
(In millions) | 2013 | 2012 | 2011 | ||||||||||
Balance at January 1, | $ | 41 | $ | 42 | $ | 33 | |||||||
Additions for tax positions of prior years | 4 | 4 | 6 | ||||||||||
Reductions for tax positions of prior years | (2 | ) | (6 | ) | (2 | ) | |||||||
Additions based on tax positions related to the current year | 10 | 9 | 9 | ||||||||||
Settlements | — | (4 | ) | (1 | ) | ||||||||
Lapse of statute of limitations | (1 | ) | (4 | ) | (3 | ) | |||||||
Balance at December 31, | $ | 52 | $ | 41 | $ | 42 | |||||||
Retirement_Plans_Tables
Retirement Plans (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||
Weighted-Average Assumptions Used to Determine Benefit Obligations | ' | ||||||||||||||||||||||||||||
Weighted-average assumptions used to determine benefit obligations: | |||||||||||||||||||||||||||||
Pension Benefits | Other | ||||||||||||||||||||||||||||
Postretirement Benefits | |||||||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||
Discount rate | 4.70%-4.90% | 3.90%-4.25% | 4.60%-4.70% | 3.90%-4.00% | |||||||||||||||||||||||||
Rate of compensation increase | 4.25% | 4.25% | |||||||||||||||||||||||||||
Weighted - Average Assumptions Used to Determine Net Periodic Benefit Cost | ' | ||||||||||||||||||||||||||||
Weighted-average assumptions used to determine net periodic benefit cost: | |||||||||||||||||||||||||||||
Pension Benefits | Other Postretirement | ||||||||||||||||||||||||||||
Benefits | |||||||||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | ||||||||||||||||||||||||
Discount rate | 3.90%-4.25% | 4.70%-4.90% | 5.40%-5.75% | 3.90%-4.00% | 4.60%-4.80% | 5.25%-5.50% | |||||||||||||||||||||||
Expected long-term return on plan assets | 7.75% | 7.75% | 7.50% | ||||||||||||||||||||||||||
Rate of compensation increase | 4.25% | 4.75% | 4.75% | ||||||||||||||||||||||||||
Assumed Health Care Cost Trend Rates for Other Postretirement Benefits | ' | ||||||||||||||||||||||||||||
Assumed health care cost trend rates for other postretirement benefits: | |||||||||||||||||||||||||||||
Other Postretirement | |||||||||||||||||||||||||||||
Benefits | |||||||||||||||||||||||||||||
Year Ended | |||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||
Pre-65 health care cost trend rate assumed for next year | 8 | % | 8.5 | % | |||||||||||||||||||||||||
Post-65 health care cost trend rate assumed for next year | 6 | % | 6 | % | |||||||||||||||||||||||||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 4.5 | % | 4.5 | % | |||||||||||||||||||||||||
Year that the rate reaches the ultimate trend rate: | |||||||||||||||||||||||||||||
Pre-65 | 2021 | 2021 | |||||||||||||||||||||||||||
Post-65 | 2021 | 2021 | |||||||||||||||||||||||||||
One-Percentage-Point Change in Assumed Health Care Cost Trend Rates | ' | ||||||||||||||||||||||||||||
A one-percentage-point change in assumed health care cost trend rates would have the following effects: | |||||||||||||||||||||||||||||
One Percentage Point | |||||||||||||||||||||||||||||
Increase | Decrease | ||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Effect on postretirement benefit obligations | $ | 15 | $ | 12 | |||||||||||||||||||||||||
Effect on total of service and interest cost | 2 | 1 | |||||||||||||||||||||||||||
Net Periodic Pension and Other Postretirement Benefit Costs | ' | ||||||||||||||||||||||||||||
Net periodic pension and other postretirement benefit costs include the following components: | |||||||||||||||||||||||||||||
Pension Benefits | Other Postretirement | ||||||||||||||||||||||||||||
Benefits | |||||||||||||||||||||||||||||
Year Ended | Year Ended | ||||||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | ||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Service cost | $ | 26 | $ | 24 | $ | 18 | $ | 6 | $ | 5 | $ | 4 | |||||||||||||||||
Interest cost | 51 | 55 | 56 | 9 | 10 | 10 | |||||||||||||||||||||||
Expected return on plan assets | (82 | ) | (76 | ) | (73 | ) | — | — | — | ||||||||||||||||||||
Amortization of unrecognized net loss (gain) | 21 | 22 | 8 | 1 | — | — | |||||||||||||||||||||||
Amortization of unrecognized prior service cost | 4 | 4 | 4 | — | (1 | ) | (1 | ) | |||||||||||||||||||||
Net periodic benefit cost | $ | 20 | $ | 29 | $ | 13 | $ | 16 | $ | 14 | $ | 13 | |||||||||||||||||
Reconciliation of Benefit Obligations, Plan Assets and Funded Status of Pension and Postretirement Plans | ' | ||||||||||||||||||||||||||||
The following provides a reconciliation of benefit obligations, plan assets and funded status of the pension and postretirement plans. | |||||||||||||||||||||||||||||
Pension Benefits | Other | ||||||||||||||||||||||||||||
Postretirement | |||||||||||||||||||||||||||||
Benefits | |||||||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Change in benefit obligation: | |||||||||||||||||||||||||||||
Benefit obligation at January 1 | $ | 1,265 | $ | 1,183 | $ | 230 | $ | 212 | |||||||||||||||||||||
Service cost | 26 | 24 | 6 | 5 | |||||||||||||||||||||||||
Interest cost | 51 | 55 | 9 | 10 | |||||||||||||||||||||||||
Plan participants’ contributions | — | — | 5 | 5 | |||||||||||||||||||||||||
Amendments | — | — | — | 2 | |||||||||||||||||||||||||
Actuarial (gain) loss | (98 | ) | 66 | (19 | ) | 12 | |||||||||||||||||||||||
Benefits paid | (65 | ) | (63 | ) | (18 | ) | (18 | ) | |||||||||||||||||||||
Other | — | — | — | 2 | |||||||||||||||||||||||||
Benefit obligation at December 31 | 1,179 | 1,265 | 213 | 230 | |||||||||||||||||||||||||
Change in plan assets: | |||||||||||||||||||||||||||||
Fair value of plan assets at January 1 | 1,078 | 998 | — | — | |||||||||||||||||||||||||
Actual return on plan assets | 90 | 112 | — | — | |||||||||||||||||||||||||
Employer contributions | 31 | 31 | 13 | 13 | |||||||||||||||||||||||||
Plan participants’ contributions | — | — | 5 | 5 | |||||||||||||||||||||||||
Benefits paid from plan assets | (65 | ) | (63 | ) | (18 | ) | (18 | ) | |||||||||||||||||||||
Fair value of plan assets at December 31 | 1,134 | 1,078 | — | — | |||||||||||||||||||||||||
Funded status | $ | (45 | ) | $ | (187 | ) | $ | (213 | ) | $ | (230 | ) | |||||||||||||||||
Amounts recognized in the balance sheets consist of: | |||||||||||||||||||||||||||||
Noncurrent assets | $ | 55 | $ | — | $ | — | $ | — | |||||||||||||||||||||
Current liabilities | — | — | (14 | ) | (14 | ) | |||||||||||||||||||||||
Noncurrent liabilities | (100 | ) | (187 | ) | (199 | ) | (216 | ) | |||||||||||||||||||||
Net amount recognized | $ | (45 | ) | $ | (187 | ) | $ | (213 | ) | $ | (230 | ) | |||||||||||||||||
Net actuarial (gain) loss | $ | (107 | ) | $ | 30 | $ | (19 | ) | $ | 12 | |||||||||||||||||||
Recognized actuarial gain (loss) | (21 | ) | (22 | ) | (1 | ) | — | ||||||||||||||||||||||
Prior service cost | — | — | — | 2 | |||||||||||||||||||||||||
Recognized prior service cost | (4 | ) | (4 | ) | — | — | |||||||||||||||||||||||
Total recognized in other comprehensive (income) loss | $ | (132 | ) | $ | 4 | $ | (20 | ) | $ | 14 | |||||||||||||||||||
Total recognized net periodic benefit cost and other comprehensive (income) loss | $ | (112 | ) | $ | 33 | $ | (4 | ) | $ | 28 | |||||||||||||||||||
Pension Plans with Accumulated Benefit Obligation in Excess of Plan Assets | ' | ||||||||||||||||||||||||||||
Information for pension plans with an accumulated benefit obligation in excess of plan assets consisted of the following: | |||||||||||||||||||||||||||||
Pension Benefits | |||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Projected benefit obligation | $ | 682 | $ | 1,265 | |||||||||||||||||||||||||
Accumulated benefit obligation | 615 | 1,189 | |||||||||||||||||||||||||||
Fair value of plan assets | 582 | 1,078 | |||||||||||||||||||||||||||
Estimated Amounts to be Recognized from Accumulated Other Comprehensive Income into Net Periodic Benefit Cost | ' | ||||||||||||||||||||||||||||
The table below presents the estimated amounts to be recognized from accumulated other comprehensive income into net periodic benefit cost during 2014. | |||||||||||||||||||||||||||||
Pension | Other | ||||||||||||||||||||||||||||
Benefits | Postretirement | ||||||||||||||||||||||||||||
Benefits | |||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Amortization of actuarial (gain) loss | $ | 9 | $ | (1 | ) | ||||||||||||||||||||||||
Amortization of prior service cost | 3 | — | |||||||||||||||||||||||||||
Total estimated amounts to be recognized | $ | 12 | $ | (1 | ) | ||||||||||||||||||||||||
Expected Future Minimum Benefit Payments | ' | ||||||||||||||||||||||||||||
Lorillard projects expected future minimum benefit payments as follows. | |||||||||||||||||||||||||||||
Expected future benefit payments | Pension | Other | Less | Net | |||||||||||||||||||||||||
Benefits | Postretirement | Medicare | |||||||||||||||||||||||||||
Benefit Plans | Drug | ||||||||||||||||||||||||||||
Subsidy | |||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
2014 | $ | 69 | $ | 15 | $ | 1 | $ | 83 | |||||||||||||||||||||
2015 | 71 | 16 | 1 | 86 | |||||||||||||||||||||||||
2016 | 73 | 16 | 1 | 88 | |||||||||||||||||||||||||
2017 | 74 | 16 | 1 | 89 | |||||||||||||||||||||||||
2018 | 76 | 17 | 1 | 92 | |||||||||||||||||||||||||
2019 – 2023 | 404 | 83 | 2 | 485 | |||||||||||||||||||||||||
$ | 767 | $ | 163 | $ | 7 | $ | 923 | ||||||||||||||||||||||
Pension Plans Asset Allocations | ' | ||||||||||||||||||||||||||||
The pension plans asset allocations were: | |||||||||||||||||||||||||||||
Asset Allocation as of | Asset Allocation as of | ||||||||||||||||||||||||||||
12/31/13 | 12/31/12 | ||||||||||||||||||||||||||||
(%) | (%) | ||||||||||||||||||||||||||||
Asset Class | |||||||||||||||||||||||||||||
U.S. Equity | 9.4 | 10.6 | |||||||||||||||||||||||||||
Global ex U.S. Equity | 9.6 | 8 | |||||||||||||||||||||||||||
Global ex Emerging Markets Equity | 4.7 | 3.8 | |||||||||||||||||||||||||||
Emerging Markets Equity | 3.9 | 3.7 | |||||||||||||||||||||||||||
Absolute Return Hedge Funds | 16.6 | 13.9 | |||||||||||||||||||||||||||
Equity Hedge Funds | 13.6 | 11.4 | |||||||||||||||||||||||||||
Private Equity | 4.5 | 4.7 | |||||||||||||||||||||||||||
Private Real Assets | 2.9 | 2.2 | |||||||||||||||||||||||||||
Public Real Assets | 2 | 2.3 | |||||||||||||||||||||||||||
Fixed Income | 29.5 | 37.3 | |||||||||||||||||||||||||||
Cash Equivalents | 3.3 | 2.1 | |||||||||||||||||||||||||||
Total | 100 | 100 | |||||||||||||||||||||||||||
Plan Assets Using Fair Value Hierarchy | ' | ||||||||||||||||||||||||||||
Plan assets using the fair value hierarchy as of December 31, 2013 were as follows: | |||||||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Asset Class: | |||||||||||||||||||||||||||||
U.S. Equity: | |||||||||||||||||||||||||||||
Securities | $ | 111 | $ | 15 | $ | — | $ | 96 | |||||||||||||||||||||
Overlay derivatives liabilities | (5 | ) | — | (5 | ) | — | |||||||||||||||||||||||
Global ex U.S. Equity | 109 | — | 109 | — | |||||||||||||||||||||||||
Global ex Emerging Markets Equity | 53 | — | 31 | 22 | |||||||||||||||||||||||||
Emerging Markets Equity: | |||||||||||||||||||||||||||||
Securities | 28 | — | 28 | — | |||||||||||||||||||||||||
Overlay derivatives assets | 17 | — | 17 | — | |||||||||||||||||||||||||
Absolute Return Hedge Funds | 188 | — | 58 | 130 | |||||||||||||||||||||||||
Equity Hedge Funds | 155 | — | 74 | 81 | |||||||||||||||||||||||||
Private Equity | 51 | — | — | 51 | |||||||||||||||||||||||||
Private Real Assets | 33 | — | — | 33 | |||||||||||||||||||||||||
Public Real Assets | 22 | — | 22 | — | |||||||||||||||||||||||||
Fixed Income: | |||||||||||||||||||||||||||||
Securities | 346 | — | 284 | 62 | |||||||||||||||||||||||||
Overlay derivatives liabilities | (12 | ) | — | (12 | ) | — | |||||||||||||||||||||||
Cash Equivalents | 38 | — | 38 | — | |||||||||||||||||||||||||
Total | $ | 1,134 | $ | 15 | $ | 644 | $ | 475 | |||||||||||||||||||||
Plan assets using the fair value hierarchy as of December 31, 2012 were as follows: | |||||||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Asset Class: | |||||||||||||||||||||||||||||
U.S. Equity: | |||||||||||||||||||||||||||||
Securities | $ | 122 | $ | 49 | $ | — | $ | 73 | |||||||||||||||||||||
Overlay derivatives liabilities | (8 | ) | — | (8 | ) | — | |||||||||||||||||||||||
Global ex U.S. Equity: | |||||||||||||||||||||||||||||
Securities | 93 | — | 93 | — | |||||||||||||||||||||||||
Overlay derivatives liabilities | (6 | ) | — | (6 | ) | — | |||||||||||||||||||||||
Global ex Emerging Markets Equity | 41 | — | 25 | 16 | |||||||||||||||||||||||||
Emerging Markets Equity: | |||||||||||||||||||||||||||||
Securities | 43 | — | 43 | — | |||||||||||||||||||||||||
Overlay derivatives liabilities | (3 | ) | — | (3 | ) | — | |||||||||||||||||||||||
Absolute Return Hedge Funds | 150 | — | 40 | 110 | |||||||||||||||||||||||||
Equity Hedge Funds | 123 | — | 62 | 61 | |||||||||||||||||||||||||
Private Equity | 51 | — | — | 51 | |||||||||||||||||||||||||
Private Real Assets | 24 | — | — | 24 | |||||||||||||||||||||||||
Public Real Assets | 23 | — | 14 | 9 | |||||||||||||||||||||||||
Fixed Income: | |||||||||||||||||||||||||||||
Securities | 375 | 241 | 69 | 65 | |||||||||||||||||||||||||
Overlay derivatives assets | 27 | — | 27 | — | |||||||||||||||||||||||||
Cash Equivalents | 23 | — | 23 | — | |||||||||||||||||||||||||
Total | $ | 1,078 | $ | 290 | $ | 379 | $ | 409 | |||||||||||||||||||||
Reconciliation of Level Three Assets | ' | ||||||||||||||||||||||||||||
The following table presents a reconciliation of Level 3 assets held during the year ended December 31, 2013. For the year ended December 31, 2013, there were no significant transfers between levels 1, 2 and 3. | |||||||||||||||||||||||||||||
January 1, | Realized | Unrealized | Purchases | Sales | Net | December 31, | |||||||||||||||||||||||
2013 | Gains/ | Gains/ | Transfers | 2013 | |||||||||||||||||||||||||
Balance | (Losses) | (Losses) | Into/(Out of) | Balance | |||||||||||||||||||||||||
Level 3 | |||||||||||||||||||||||||||||
US Equity | $ | 73 | $ | (1 | ) | $ | 23 | $ | 9 | $ | (8 | ) | $ | — | $ | 96 | |||||||||||||
Global ex Emerging Markets Equity | 16 | — | 6 | — | — | — | 22 | ||||||||||||||||||||||
Absolute Return Hedge Funds | 110 | 2 | 16 | 12 | (10 | ) | — | 130 | |||||||||||||||||||||
Equity Hedge Funds | 61 | — | 11 | 25 | (16 | ) | — | 81 | |||||||||||||||||||||
Private Equity | 51 | 3 | 5 | 6 | (14 | ) | — | 51 | |||||||||||||||||||||
Private Real Assets | 24 | 2 | 4 | 11 | (8 | ) | — | 33 | |||||||||||||||||||||
Public Real Assets | 9 | (1 | ) | 1 | — | (9 | ) | — | — | ||||||||||||||||||||
Fixed Income | 65 | — | (3 | ) | — | — | — | 62 | |||||||||||||||||||||
The following table presents a reconciliation of Level 3 assets held during the year ended December 31, 2012. For the year ended December 31, 2012, there were no significant transfers between levels 1, 2 and 3. | |||||||||||||||||||||||||||||
January 1, | Realized | Unrealized | Purchases | Sales | Net | December 31, | |||||||||||||||||||||||
2012 | Gains/ | Gains/ | Transfers | 2012 | |||||||||||||||||||||||||
Balance | (Losses) | (Losses) | Into/(Out of) | Balance | |||||||||||||||||||||||||
Level 3 | |||||||||||||||||||||||||||||
US Equity | $ | 66 | $ | — | $ | 12 | $ | — | $ | (5 | ) | $ | — | $ | 73 | ||||||||||||||
Global ex Emerging Markets Equity | — | — | 1 | 15 | — | — | 16 | ||||||||||||||||||||||
Absolute Return Hedge Funds | 80 | 2 | 7 | 29 | (8 | ) | — | 110 | |||||||||||||||||||||
Equity Hedge Funds | 50 | — | 2 | 13 | (4 | ) | — | 61 | |||||||||||||||||||||
Private Equity | 47 | 1 | 5 | 9 | (10 | ) | (1 | ) | 51 | ||||||||||||||||||||
Private Real Assets | 16 | 1 | 1 | 10 | (4 | ) | — | 24 | |||||||||||||||||||||
Public Real Assets | 9 | — | — | — | — | — | 9 | ||||||||||||||||||||||
Fixed Income | — | — | — | 65 | — | — | 65 |
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Summary of Stock Option and Stock Appreciation Rights Transactions | ' | ||||||||||||||||||||||||
A summary of the stock option and SAR transactions for the Lorillard Plan for 2013, 2012, and 2011 is as follows: | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Number of | Weighted | Number of | Weighted | Number of | Weighted | ||||||||||||||||||||
Awards | Average | Awards | Average | Awards | Average | ||||||||||||||||||||
Exercise | Exercise | Exercise | |||||||||||||||||||||||
Price | Price | Price | |||||||||||||||||||||||
Awards outstanding, January 1, | 3,434,256 | $ | 26.95 | 4,388,862 | $ | 25.94 | 4,428,339 | $ | 23.19 | ||||||||||||||||
Granted | — | — | — | — | 1,026,060 | 34.37 | |||||||||||||||||||
Exercised | (1,404,674 | ) | 24.1 | (930,156 | ) | 22.28 | (1,040,094 | ) | 22.65 | ||||||||||||||||
Forfeited | — | — | (20,631 | ) | 23.62 | (25,443 | ) | 23.72 | |||||||||||||||||
Expired | — | — | (3,819 | ) | 23.53 | — | — | ||||||||||||||||||
Awards outstanding, December 31 | 2,029,582 | 28.92 | 3,434,256 | 26.95 | 4,388,862 | 25.94 | |||||||||||||||||||
Awards exercisable, December 31 | 1,350,409 | 27.31 | 1,760,898 | 25.05 | 1,505,325 | 22.23 | |||||||||||||||||||
Shares available for grant, December 31 | 4,690,378 | 4,375,683 | 4,270,449 | ||||||||||||||||||||||
Information about Stock Options and Stock Appreciation Rights Outstanding in Connection with Lorillard Plan | ' | ||||||||||||||||||||||||
The following table summarizes information about stock options and SARs outstanding in connection with the Lorillard Plan at December 31, 2013: | |||||||||||||||||||||||||
Awards Outstanding | Awards Vested | ||||||||||||||||||||||||
Range of exercise prices | Number of | Weighted | Weighted | Number of | Weighted | ||||||||||||||||||||
Shares | Average | Average | Shares | Average | |||||||||||||||||||||
Remaining | Exercise | Exercise | |||||||||||||||||||||||
Contractual | Price | Price | |||||||||||||||||||||||
Life | |||||||||||||||||||||||||
$6.67 – 11.66 | 3,000 | 1.1 | $ | 10.84 | 3,000 | $ | 10.84 | ||||||||||||||||||
11.67 – 16.66 | 31,686 | 2.1 | 15.67 | 31,686 | 15.67 | ||||||||||||||||||||
16.67 – 21.66 | 144,285 | 4.4 | 19.87 | 144,285 | 19.87 | ||||||||||||||||||||
21.67 – 26.66 | 728,053 | 5.7 | 24.83 | 525,271 | 24.51 | ||||||||||||||||||||
26.67 – 31.66 | 419,148 | 5.4 | 27.09 | 318,960 | 27.09 | ||||||||||||||||||||
31.67 – 36.66 | 280,146 | 7.2 | 35.73 | 143,325 | 35.46 | ||||||||||||||||||||
36.67 – 38.00 | 423,264 | 7.2 | 37.45 | 183,882 | 37.45 | ||||||||||||||||||||
Fair Value of Granted Options and Stock Appreciation Rights Estimated Using Black- Scholes Pricing Model | ' | ||||||||||||||||||||||||
The fair value of granted options and SARs for the Lorillard Plan was estimated at the grant date using the Black-Scholes pricing model with the following assumptions and results: | |||||||||||||||||||||||||
Year Ended December 31, | 2011 | ||||||||||||||||||||||||
Weighted average expected dividend yield | 5.8 | % | |||||||||||||||||||||||
Weighted average expected implied volatility | 30 | % | |||||||||||||||||||||||
Weighted average risk-free interest rate | 1.5 | % | |||||||||||||||||||||||
Expected holding period (in years) | 5 | ||||||||||||||||||||||||
Weighted average fair value of awards | $ | 4.9 | |||||||||||||||||||||||
Restricted Stock Unit Activity | ' | ||||||||||||||||||||||||
RSU activity was as follows for the year ended December 31, 2013: | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Number of | Weighted | Number of | Weighted | ||||||||||||||||||||||
Restricted Stock Units | Average | Restricted Stock Units | Average | ||||||||||||||||||||||
Grant Date | Grant Date | ||||||||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||||||||
Outstanding, January 1, | 207,339 | $ | 42.36 | — | $ | — | |||||||||||||||||||
Granted | 217,216 | 41.63 | 210,891 | 42.36 | |||||||||||||||||||||
Transferred to restricted | (192,672 | ) | 42.35 | — | — | ||||||||||||||||||||
Forfeited | (12,672 | ) | 42.42 | (3,552 | ) | 42.35 | |||||||||||||||||||
Outstanding, December 31 | 219,211 | 41.64 | 207,339 | 42.36 | |||||||||||||||||||||
Restricted Stock Activity | ' | ||||||||||||||||||||||||
Restricted stock activity was as follows for the years ended December 31, 2013, 2012 and 2011: | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Number | Weighted- | Number | Weighted- | Number | Weighted- | ||||||||||||||||||||
of Awards | Average | of Awards | Average | of Awards | Average | ||||||||||||||||||||
Grant | Grant | Grant | |||||||||||||||||||||||
Date Fair | Date Fair | Date Fair | |||||||||||||||||||||||
Value Per | Value Per | Value Per | |||||||||||||||||||||||
Share | Share | Share | |||||||||||||||||||||||
Balance at January 1, | 1,028,844 | $ | 28.33 | 1,310,619 | $ | 24.97 | 758,049 | $ | 23.76 | ||||||||||||||||
Granted | 166,125 | 41.28 | 156,450 | 40.97 | 599,526 | 26.5 | |||||||||||||||||||
Transferred from RSU | 179,280 | 42.35 | — | — | — | — | |||||||||||||||||||
Vested | (362,100 | ) | 26.25 | (396,786 | ) | 22.27 | (24,156 | ) | 24.85 | ||||||||||||||||
Forfeited | (18,837 | ) | 31.49 | (41,439 | ) | 28.01 | (22,800 | ) | 24.95 | ||||||||||||||||
Balance at December 31, | 993,312 | 33.72 | 1,028,844 | 28.33 | 1,310,619 | 24.97 | |||||||||||||||||||
Share_Repurchase_Programs_Tabl
Share Repurchase Programs (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Share Repurchase Program | ' | ||||||||
As of December 31, 2013, total shares repurchased under share repurchase programs authorized by the Board since the separation from Loews in 2008 were as follows: | |||||||||
Program | Amount | Number of | |||||||
Authorized | Shares | ||||||||
Repurchased | |||||||||
(In millions) | (In millions) | ||||||||
July 2008 - October 2008 | $ | 400 | 17.6 | ||||||
May 2009 - July 2009 | 250 | 11 | |||||||
July 2009 - January 2010 | 750 | 29.3 | |||||||
February 2010 - May 2010 | 250 | 9.8 | |||||||
August 2010 * - August 2011 | 1,400 | 45.1 | |||||||
August 2011 - February 2012 | 750 | 20.1 | |||||||
August 2012 - January 2013 | 500 | 12.7 | |||||||
March 2013 ** - | 1,000 | 15.2 | |||||||
Total | $ | 5,300 | 160.8 | ||||||
* | As amended on May 19, 2011 | ||||||||
** | As amended on May 21, 2013 |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Changes in Accumulated Other Comprehensive Loss | ' | ||||||||||||
Changes in accumulated other comprehensive loss during the period consisted of the following: | |||||||||||||
Defined Benefit | Foreign | Total | |||||||||||
Pension | Currency | ||||||||||||
Plan Items | |||||||||||||
(In millions) | |||||||||||||
Beginning balance, January 1, 2013 | $ | 241 | $ | — | $ | 241 | |||||||
Pension and post-retirement plan actuarial gains and prior service cost | (110 | ) | — | (110 | ) | ||||||||
Foreign currency translation adjustments | — | (1 | ) | (1 | ) | ||||||||
Ending balance December 31, 2013 | $ | 131 | $ | (1 | ) | $ | 130 | ||||||
Reclassifications Out of Accumulated Other Comprehensive Loss | ' | ||||||||||||
Reclassifications out of accumulated other comprehensive loss during the period were as follows: | |||||||||||||
Amount | Affected Line | ||||||||||||
Reclassified from | Item in the Consolidated | ||||||||||||
Accumulated Other | Statements of Income | ||||||||||||
Comprehensive Loss | |||||||||||||
(In millions) | |||||||||||||
Amortization of defined benefit pension and post-retirement items: | |||||||||||||
Prior service costs | $ | (4 | ) | (A) | |||||||||
Actuarial loss | (20 | ) | (A) | ||||||||||
(24 | ) | Total before tax | |||||||||||
8 | Income tax benefit | ||||||||||||
Total reclassifications for the period | $ | (16 | ) | Net of tax | |||||||||
(A) | These accumulated comprehensive loss components are included in the computation of net periodic pension cost (see Note 16, “Retirement Plans,” for additional details), which is included in cost of sales and selling, general and administrative expenses. |
Quarterly_Financial_Data_Unaud1
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Quarterly Financial Data | ' | ||||||||||||||||
Quarterly Financial Data (Unaudited) | |||||||||||||||||
(In millions, except per share data) | |||||||||||||||||
2013 Quarter Ended | 31-Dec | 30-Sep | 30-Jun | 31-Mar | |||||||||||||
Net sales | $ | 1,743 | $ | 1,827 | $ | 1,804 | $ | 1,577 | |||||||||
Gross profit | 659 | 669 | 678 | 713 | |||||||||||||
Net income | 281 | 258 | 313 | 328 | |||||||||||||
Net income per share, diluted | $ | 0.76 | $ | 0.69 | $ | 0.83 | $ | 0.86 | |||||||||
Basic weighted average number of shares outstanding | 366.53 | 371.01 | 375.86 | 378.62 | |||||||||||||
Diluted weighted average number of shares outstanding | 367.19 | 371.77 | 376.61 | 379.42 | |||||||||||||
2012 Quarter Ended | 31-Dec | 30-Sep | 30-Jun | 31-Mar | |||||||||||||
Net sales | $ | 1,704 | $ | 1,661 | $ | 1,731 | $ | 1,526 | |||||||||
Gross profit | 644 | 602 | 612 | 523 | |||||||||||||
Net income | 309 | 283 | 284 | 223 | |||||||||||||
Net income per share, diluted | $ | 0.8 | $ | 0.72 | $ | 0.72 | $ | 0.57 | |||||||||
Basic weighted average number of shares outstanding | 384.87 | 390.21 | 390.53 | 391.45 | |||||||||||||
Diluted weighted average number of shares outstanding | 385.59 | 391.05 | 391.44 | 392.4 |
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Segment Information | ' | ||||||||||||||||
(In millions) | Year Ended December 31, 2013 | ||||||||||||||||
Cigarettes | Electronic | Consolidating | Total | ||||||||||||||
Cigarettes | Adjustments | Lorillard | |||||||||||||||
Net sales | $ | 6,720 | $ | 230 | $ | — | $ | 6,950 | |||||||||
Cost of sales | 4,071 | 160 | — | 4,231 | |||||||||||||
Gross profit | 2,649 | 70 | — | 2,719 | |||||||||||||
Selling, general and administrative | 595 | 70 | — | 665 | |||||||||||||
Operating income | $ | 2,054 | $ | — | $ | — | $ | 2,054 | |||||||||
Depreciation and amortization | $ | 44 | $ | 6 | $ | — | $ | 50 | |||||||||
Total assets | $ | 3,316 | $ | 345 | $ | (125 | ) | $ | 3,536 | ||||||||
Capital expenditures | $ | 61 | $ | 1 | — | $ | 62 | ||||||||||
(In millions) | Year Ended December 31, 2012 | ||||||||||||||||
Cigarettes | Electronic | Consolidating | Total | ||||||||||||||
Cigarettes | Adjustments | Lorillard | |||||||||||||||
Net sales | $ | 6,562 | $ | 61 | $ | — | $ | 6,623 | |||||||||
Cost of sales | 4,201 | 40 | — | 4,241 | |||||||||||||
Gross profit | 2,361 | 21 | — | 2,382 | |||||||||||||
Selling, general and administrative | 484 | 20 | — | 504 | |||||||||||||
Operating income | $ | 1,877 | $ | 1 | $ | — | $ | 1,878 | |||||||||
Depreciation and amortization | $ | 38 | $ | 1 | $ | — | $ | 39 | |||||||||
Total assets | $ | 3,313 | $ | 208 | $ | (125 | ) | $ | 3,396 | ||||||||
Capital expenditures | $ | 74 | — | — | $ | 74 |
Consolidating_Financial_Inform1
Consolidating Financial Information (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Condensed Consolidating Balance Sheets | ' | ||||||||||||||||||||
Condensed Consolidating Balance Sheets | |||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Parent | Issuer | Non- | Total | Consolidated | |||||||||||||||||
guarantor | Consolidating | ||||||||||||||||||||
Subsidiaries | Adjustments | ||||||||||||||||||||
Assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 341 | $ | 1,002 | $ | 111 | $ | — | $ | 1,454 | |||||||||||
Short term investments—available for sale securities | — | 157 | — | — | 157 | ||||||||||||||||
Accounts receivable, less allowances of $3 | — | 8 | 11 | — | 19 | ||||||||||||||||
Other receivables (1) | — | 24 | 93 | (88 | ) | 29 | |||||||||||||||
Inventories | — | 412 | 87 | — | 499 | ||||||||||||||||
Deferred income taxes | — | 549 | 6 | — | 555 | ||||||||||||||||
Other current assets | — | 19 | 4 | — | 23 | ||||||||||||||||
Total current assets | 341 | 2,171 | 312 | (88 | ) | 2,736 | |||||||||||||||
Investment in subsidiaries | — | 148 | — | (148 | ) | — | |||||||||||||||
Plant and equipment, net | — | 315 | 1 | — | 316 | ||||||||||||||||
Long term investments—available for sale securities | — | 93 | — | — | 93 | ||||||||||||||||
Goodwill | — | — | 102 | — | 102 | ||||||||||||||||
Intangible assets | — | — | 87 | — | 87 | ||||||||||||||||
Deferred income taxes | — | 48 | 3 | — | 51 | ||||||||||||||||
Other assets | 125 | 151 | — | (125 | ) | 151 | |||||||||||||||
Total assets | $ | 466 | $ | 2,926 | $ | 505 | $ | (361 | ) | $ | 3,536 | ||||||||||
Liabilities and Shareholders’ Equity (Deficit): | |||||||||||||||||||||
Accounts and drafts payable | $ | — | $ | 37 | $ | 5 | $ | — | $ | 42 | |||||||||||
Accrued liabilities (1) | 13 | 434 | 14 | (84 | ) | 377 | |||||||||||||||
Settlement costs | — | 1,224 | — | — | 1,224 | ||||||||||||||||
Income taxes | 1 | 11 | — | (4 | ) | 8 | |||||||||||||||
Total current liabilities | 14 | 1,706 | 19 | (88 | ) | 1,651 | |||||||||||||||
Long-term debt | — | 3,560 | — | — | 3,560 | ||||||||||||||||
Investment in subsidiaries | 2,516 | — | — | (2,516 | ) | — | |||||||||||||||
Postretirement pension, medical and life insurance benefits | — | 305 | — | — | 305 | ||||||||||||||||
Other liabilities | — | 44 | 165 | (125 | ) | 84 | |||||||||||||||
Total liabilities | 2,530 | 5,615 | 184 | (2,729 | ) | 5,600 | |||||||||||||||
Shareholders’ Equity (Deficit): | |||||||||||||||||||||
Common stock | 4 | — | — | — | 4 | ||||||||||||||||
Additional paid-in capital | 256 | 130 | 177 | (307 | ) | 256 | |||||||||||||||
Retained earnings/accumulated (deficit) | (1,438 | ) | (2,688 | ) | 143 | 2,545 | (1,438 | ) | |||||||||||||
Accumulated other comprehensive income (loss) | (130 | ) | (131 | ) | 1 | 130 | (130 | ) | |||||||||||||
Treasury stock | (756 | ) | — | — | — | (756 | ) | ||||||||||||||
Total shareholders’ equity (deficit) | (2,064 | ) | (2,689 | ) | 321 | 2,368 | (2,064 | ) | |||||||||||||
Total liabilities and shareholders’ equity (deficit) | $ | 466 | $ | 2,926 | $ | 505 | $ | (361 | ) | $ | 3,536 | ||||||||||
-1 | Includes intercompany royalties between Issuer and non-guarantor subsidiaries of a corresponding amount. | ||||||||||||||||||||
Condensed Consolidating Balance Sheets | |||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Parent | Issuer | Non- | Total | Consolidated | |||||||||||||||||
guarantor | Consolidating | ||||||||||||||||||||
Subsidiaries | Adjustments | ||||||||||||||||||||
Assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 150 | $ | 1,471 | $ | 99 | $ | — | $ | 1,720 | |||||||||||
Accounts receivable, less allowances of $3 | — | 8 | 10 | — | 18 | ||||||||||||||||
Other receivables (1) | 1 | 41 | 77 | (67 | ) | 52 | |||||||||||||||
Inventories | — | 369 | 41 | — | 410 | ||||||||||||||||
Deferred income taxes | — | 555 | 2 | — | 557 | ||||||||||||||||
Other current assets | — | 12 | 8 | — | 20 | ||||||||||||||||
Total current assets | 151 | 2,456 | 237 | (67 | ) | 2,777 | |||||||||||||||
Investment in subsidiaries | — | 118 | — | (118 | ) | — | |||||||||||||||
Plant and equipment, net | — | 298 | — | — | 298 | ||||||||||||||||
Goodwill | — | — | 64 | — | 64 | ||||||||||||||||
Intangible assets | — | — | 57 | — | 57 | ||||||||||||||||
Deferred income taxes | — | 45 | 5 | (2 | ) | 48 | |||||||||||||||
Other assets | 125 | 152 | — | (125 | ) | 152 | |||||||||||||||
Total assets | $ | 276 | $ | 3,069 | $ | 363 | $ | (312 | ) | $ | 3,396 | ||||||||||
Liabilities and Shareholders’ Equity (Deficit): | |||||||||||||||||||||
Accounts and drafts payable | $ | — | $ | 35 | $ | 4 | $ | — | $ | 39 | |||||||||||
Accrued liabilities (1) | 14 | 399 | 10 | (67 | ) | 356 | |||||||||||||||
Settlement costs | — | 1,183 | — | — | 1,183 | ||||||||||||||||
Income taxes | — | — | 23 | — | 23 | ||||||||||||||||
Total current liabilities | 14 | 1,617 | 37 | (67 | ) | 1,601 | |||||||||||||||
Long-term debt | — | 3,111 | — | — | 3,111 | ||||||||||||||||
Investment in subsidiaries | 2,037 | — | — | (2,037 | ) | — | |||||||||||||||
Postretirement pension, medical and life insurance benefits | — | 409 | — | — | 409 | ||||||||||||||||
Other liabilities | 2 | 39 | 138 | (127 | ) | 52 | |||||||||||||||
Total liabilities | 2,053 | 5,176 | 175 | (2,231 | ) | 5,173 | |||||||||||||||
Shareholders’ Equity (Deficit): | |||||||||||||||||||||
Common stock | 5 | — | — | — | 5 | ||||||||||||||||
Additional paid-in capital | 298 | 92 | 72 | (164 | ) | 298 | |||||||||||||||
Retained earnings/accumulated (deficit) | 2,351 | (1,958 | ) | 116 | 1,842 | 2,351 | |||||||||||||||
Accumulated other comprehensive income (loss) | (241 | ) | (241 | ) | — | 241 | (241 | ) | |||||||||||||
Treasury stock | (4,190 | ) | — | — | — | (4,190 | ) | ||||||||||||||
Total shareholders’ equity (deficit) | (1,777 | ) | (2,107 | ) | 188 | 1,919 | (1,777 | ) | |||||||||||||
Total liabilities and shareholders’ equity (deficit) | $ | 276 | $ | 3,069 | $ | 363 | $ | (312 | ) | $ | 3,396 | ||||||||||
-1 | Includes intercompany royalties between Issuer and non-guarantor subsidiaries of a corresponding amount. | ||||||||||||||||||||
Condensed Consolidating Statements of Income | ' | ||||||||||||||||||||
Condensed Consolidating Statements of Income | |||||||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Parent | Issuer | Non- | Total | Consolidated | |||||||||||||||||
guarantor | Consolidating | ||||||||||||||||||||
Subsidiaries | Adjustments | ||||||||||||||||||||
Net sales (including excise taxes of $1,978) | $ | — | $ | 6,720 | $ | 1,333 | $ | (1,103 | ) | $ | 6,950 | ||||||||||
Cost of sales (including excise taxes of $1,978) | — | 4,071 | 160 | — | 4,231 | ||||||||||||||||
Gross profit | — | 2,649 | 1,173 | (1,103 | ) | 2,719 | |||||||||||||||
Selling, general and administrative (1) | 2 | 1,692 | 74 | (1,103 | ) | 665 | |||||||||||||||
Operating income | (2 | ) | 957 | 1,099 | — | 2,054 | |||||||||||||||
Investment income | 6 | 2 | — | (6 | ) | 2 | |||||||||||||||
Interest expense | — | (172 | ) | (6 | ) | 6 | (172 | ) | |||||||||||||
Income before taxes | 4 | 787 | 1,093 | — | 1,884 | ||||||||||||||||
Income taxes | 4 | 295 | 405 | — | 704 | ||||||||||||||||
Equity in earnings of subsidiaries | 1,180 | 690 | — | (1,870 | ) | — | |||||||||||||||
Net income | $ | 1,180 | $ | 1,182 | $ | 688 | $ | (1,870 | ) | $ | 1,180 | ||||||||||
-1 | Includes intercompany royalties between Issuer and non-guarantor subsidiaries of a corresponding amount. | ||||||||||||||||||||
Condensed Consolidating Statements of Income | |||||||||||||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Parent | Issuer | Non- | Total | Consolidated | |||||||||||||||||
guarantor | Consolidating | ||||||||||||||||||||
Subsidiaries | Adjustments | ||||||||||||||||||||
Net sales (including excise taxes of $1,987) | $ | — | $ | 6,562 | $ | 1,118 | $ | (1,057 | ) | $ | 6,623 | ||||||||||
Cost of sales (including excise taxes of $1,987) | — | 4,201 | 40 | — | 4,241 | ||||||||||||||||
Gross profit | — | 2,361 | 1,078 | (1,057 | ) | 2,382 | |||||||||||||||
Selling, general and administrative (1) | 1 | 1,536 | 24 | (1,057 | ) | 504 | |||||||||||||||
Operating income | (1 | ) | 825 | 1,054 | — | 1,878 | |||||||||||||||
Investment income | — | 3 | 1 | — | 4 | ||||||||||||||||
Interest expense | (1 | ) | (151 | ) | (2 | ) | — | (154 | ) | ||||||||||||
Income before taxes | (2 | ) | 677 | 1,053 | — | 1,728 | |||||||||||||||
Income taxes | (1 | ) | 238 | 392 | — | 629 | |||||||||||||||
Equity in earnings of subsidiaries | 1,100 | 661 | — | (1,761 | ) | — | |||||||||||||||
Net income | $ | 1,099 | $ | 1,100 | $ | 661 | $ | (1,761 | ) | $ | 1,099 | ||||||||||
-1 | Includes intercompany royalties between Issuer and non-guarantor subsidiaries of a corresponding amount. | ||||||||||||||||||||
Condensed Consolidating Statements of Income | |||||||||||||||||||||
For the Year Ended December 31, 2011 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Parent | Issuer | Non- | Total | Consolidated | |||||||||||||||||
guarantor | Consolidating | ||||||||||||||||||||
Subsidiaries | Adjustments | ||||||||||||||||||||
Net sales (including excise taxes of $2,014) | $ | — | $ | 6,466 | $ | — | $ | — | $ | 6,466 | |||||||||||
Cost of sales (including excise taxes of $2,014) | — | 4,123 | — | — | 4,123 | ||||||||||||||||
Gross profit | — | 2,343 | — | — | 2,343 | ||||||||||||||||
Selling, general and administrative (1) | — | 1,473 | (1,022 | ) | — | 451 | |||||||||||||||
Operating income | — | 870 | 1,022 | — | 1,892 | ||||||||||||||||
Investment income | 1 | 1 | 1 | — | 3 | ||||||||||||||||
Interest expense | — | (125 | ) | — | — | (125 | ) | ||||||||||||||
Income before taxes | 1 | 746 | 1,023 | — | 1,770 | ||||||||||||||||
Income taxes | — | 290 | 364 | — | 654 | ||||||||||||||||
Equity in earnings of subsidiaries | 1,115 | 659 | — | (1,774 | ) | — | |||||||||||||||
Net income | $ | 1,116 | $ | 1,115 | $ | 659 | $ | (1,774 | ) | $ | 1,116 | ||||||||||
-1 | Includes intercompany royalties between Issuer and non-guarantor subsidiaries of a corresponding amount. | ||||||||||||||||||||
Condensed Consolidating Statements of Comprehensive Income | ' | ||||||||||||||||||||
Condensed Consolidating Statements of Comprehensive Income | |||||||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Parent | Issuer | Non- | Total | Consolidated | |||||||||||||||||
guarantor | Consolidating | ||||||||||||||||||||
Subsidiaries | Adjustments | ||||||||||||||||||||
Net income | $ | 1,180 | $ | 1,182 | $ | 688 | $ | (1,870 | ) | $ | 1,180 | ||||||||||
Other comprehensive income, net of tax: | |||||||||||||||||||||
Defined benefit retirement plans gain, net of tax expense of $41 | 110 | 110 | — | (110 | ) | 110 | |||||||||||||||
Foreign currency translation adjustments, net of tax benefit of $– | 1 | — | 1 | (1 | ) | 1 | |||||||||||||||
Other comprehensive income | 111 | 110 | 1 | (111 | ) | 111 | |||||||||||||||
Comprehensive income | $ | 1,291 | $ | 1,292 | $ | 689 | $ | (1,981 | ) | $ | 1,291 | ||||||||||
Condensed Consolidating Statements of Comprehensive Income | |||||||||||||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Parent | Issuer | Non- | Total | Consolidated | |||||||||||||||||
guarantor | Consolidating | ||||||||||||||||||||
Subsidiaries | Adjustments | ||||||||||||||||||||
Net income | $ | 1,099 | $ | 1,100 | $ | 661 | $ | (1,761 | ) | $ | 1,099 | ||||||||||
Other comprehensive loss, net of tax: | |||||||||||||||||||||
Defined benefit retirement plans loss, net of tax benefit of $(4) | — | (13 | ) | — | — | (13 | ) | ||||||||||||||
Other comprehensive loss | — | (13 | ) | — | — | (13 | ) | ||||||||||||||
Comprehensive income | $ | 1,099 | $ | 1,087 | $ | 661 | $ | (1,761 | ) | $ | 1,086 | ||||||||||
Condensed Consolidating Statements of Comprehensive Income | |||||||||||||||||||||
For the Year Ended December 31, 2011 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Parent | Issuer | Non- | Total | Consolidated | |||||||||||||||||
guarantor | Consolidating | ||||||||||||||||||||
Subsidiaries | Adjustments | ||||||||||||||||||||
Net income | $ | 1,116 | $ | 1,115 | $ | 659 | $ | (1,774 | ) | $ | 1,116 | ||||||||||
Other comprehensive loss, net of tax: | |||||||||||||||||||||
Defined benefit retirement plans loss, net of tax benefit of $(64) | — | (119 | ) | — | — | (119 | ) | ||||||||||||||
Other comprehensive loss | — | (119 | ) | — | — | (119 | ) | ||||||||||||||
Comprehensive income | $ | 1,116 | $ | 996 | $ | 659 | $ | (1,774 | ) | $ | 997 | ||||||||||
Condensed Consolidating Statements of Cash Flows | ' | ||||||||||||||||||||
Condensed Consolidating Statements of Cash Flows | |||||||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Parent | Issuer | Non- | Total | Consolidated | |||||||||||||||||
guarantor | Consolidating | ||||||||||||||||||||
Subsidiaries | Adjustments | ||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||
Net income | $ | 1,180 | $ | 1,182 | $ | 688 | $ | (1,870 | ) | $ | 1,180 | ||||||||||
Adjustments to reconcile to net cash provided by operating activities: | |||||||||||||||||||||
Equity income from subsidiaries | (1,180 | ) | (690 | ) | — | 1,870 | — | ||||||||||||||
Depreciation and amortization | — | 44 | 6 | — | 50 | ||||||||||||||||
Pension, health and life insurance contributions | — | (44 | ) | — | — | (44 | ) | ||||||||||||||
Pension, health and life insurance benefits expense | — | 36 | — | — | 36 | ||||||||||||||||
Deferred income taxes | (1 | ) | (39 | ) | (2 | ) | — | (42 | ) | ||||||||||||
Share-based compensation | 1 | 17 | — | — | 18 | ||||||||||||||||
Excess tax benefits from share-based arrangements | — | (13 | ) | — | — | (13 | ) | ||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||||||
Accounts and other receivables | — | (8 | ) | (16 | ) | 17 | (7 | ) | |||||||||||||
Inventories | — | (43 | ) | (46 | ) | — | (89 | ) | |||||||||||||
Accounts payable and accrued liabilities | (1 | ) | 37 | 1 | (17 | ) | 20 | ||||||||||||||
Settlement costs | — | 41 | — | — | 41 | ||||||||||||||||
Income taxes | 2 | 54 | (20 | ) | 36 | ||||||||||||||||
Other current assets | — | (1 | ) | 4 | — | 3 | |||||||||||||||
Other assets | — | 3 | — | — | 3 | ||||||||||||||||
Return on investment in subsidiaries | 1,913 | 661 | — | (2,574 | ) | — | |||||||||||||||
Net cash provided by (used in) operating activities | 1,914 | 1,237 | 615 | (2,574 | ) | 1,192 | |||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||
Purchases of investments | — | (276 | ) | — | — | (276 | ) | ||||||||||||||
Business acquisition | — | — | (46 | ) | — | (46 | ) | ||||||||||||||
Additions to plant and equipment | — | (61 | ) | (1 | ) | — | (62 | ) | |||||||||||||
Sales, maturities and calls of investments | — | 26 | — | — | 26 | ||||||||||||||||
Investment in subsidiary | (105 | ) | — | — | 105 | — | |||||||||||||||
Net cash provided by (used in) investing activities | (105 | ) | (311 | ) | (47 | ) | 105 | (358 | ) | ||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||
Proceeds from issuance of long-term debt | — | 500 | — | — | 500 | ||||||||||||||||
Dividends paid | (823 | ) | (1,913 | ) | (661 | ) | 2,574 | (823 | ) | ||||||||||||
Shares repurchased | (795 | ) | — | — | — | (795 | ) | ||||||||||||||
Debt issuance costs | — | (4 | ) | — | — | (4 | ) | ||||||||||||||
Contributions from parent | — | — | 105 | (105 | ) | — | |||||||||||||||
Proceeds from exercise of stock options | — | 9 | — | — | 9 | ||||||||||||||||
Excess tax benefits from share-based arrangements | — | 13 | — | — | 13 | ||||||||||||||||
Net cash provided by (used in) financing activities | (1,618 | ) | (1,395 | ) | (556 | ) | 2,469 | (1,100 | ) | ||||||||||||
Effect of foreign currency rate changes on cash and cash equivalents | — | — | — | — | — | ||||||||||||||||
Change in cash and cash equivalents | 191 | (469 | ) | 12 | — | (266 | ) | ||||||||||||||
Cash and cash equivalents, beginning of year | 150 | 1,471 | 99 | — | 1,720 | ||||||||||||||||
Cash and cash equivalents, end of year | $ | 341 | $ | 1,002 | $ | 111 | $ | — | $ | 1,454 | |||||||||||
Condensed Consolidating Statements of Cash Flows | |||||||||||||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Parent | Issuer | Non- | Total | Consolidated | |||||||||||||||||
guarantor | Consolidating | ||||||||||||||||||||
Subsidiaries | Adjustments | ||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||
Net income | $ | 1,099 | $ | 1,100 | $ | 661 | $ | (1,761 | ) | $ | 1,099 | ||||||||||
Adjustments to reconcile to net cash provided by operating activities: | |||||||||||||||||||||
Equity income from subsidiaries | (1,100 | ) | (661 | ) | — | 1,761 | — | ||||||||||||||
Depreciation and amortization | — | 38 | 1 | — | 39 | ||||||||||||||||
Pension, health and life insurance contributions | — | (43 | ) | — | — | (43 | ) | ||||||||||||||
Pension, health and life insurance benefits expense | — | 44 | — | — | 44 | ||||||||||||||||
Deferred income taxes | 1 | (10 | ) | (2 | ) | — | (11 | ) | |||||||||||||
Share-based compensation | 1 | 19 | — | — | 20 | ||||||||||||||||
Excess tax benefits from share-based arrangements | — | (11 | ) | — | — | (11 | ) | ||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||||||
Accounts and other receivables | — | 877 | (10 | ) | (875 | ) | (8 | ) | |||||||||||||
Inventories | — | (92 | ) | (26 | ) | — | (118 | ) | |||||||||||||
Accounts payable and accrued liabilities | — | 50 | (861 | ) | 875 | 64 | |||||||||||||||
Settlement costs | — | 32 | — | — | 32 | ||||||||||||||||
Income taxes | (1 | ) | 43 | 17 | 59 | ||||||||||||||||
Other current assets | — | 13 | (8 | ) | — | 5 | |||||||||||||||
Other assets | — | (1 | ) | — | — | (1 | ) | ||||||||||||||
Return on investment in subsidiaries | 1,495 | 550 | — | (2,045 | ) | — | |||||||||||||||
Net cash provided by (used in) operating activities | 1,495 | 1,948 | (228 | ) | (2,045 | ) | 1,170 | ||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||
Business acquisition, net of cash acquired (1) | (125 | ) | — | (135 | ) | 125 | (135 | ) | |||||||||||||
Additions to plant and equipment | — | (74 | ) | — | — | (74 | ) | ||||||||||||||
Investment in subsidiary | (70 | ) | — | — | 70 | — | |||||||||||||||
Net cash provided by (used in) investing activities | (195 | ) | (74 | ) | (135 | ) | 195 | (209 | ) | ||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||
Shares repurchased | (578 | ) | — | — | — | (578 | ) | ||||||||||||||
Proceeds from issuance of long-term debt | — | 500 | 125 | (125 | ) | 500 | |||||||||||||||
Dividends paid | (807 | ) | (1,495 | ) | (550 | ) | 2,045 | (807 | ) | ||||||||||||
Debt issuance costs | — | (5 | ) | — | — | (5 | ) | ||||||||||||||
Contributions from parent | — | — | 70 | (70 | ) | — | |||||||||||||||
Proceeds from exercise of stock options | — | 5 | — | — | 5 | ||||||||||||||||
Excess tax benefits from share-based arrangements | — | 10 | — | — | 10 | ||||||||||||||||
Net cash provided by (used in) financing activities | (1,385 | ) | (985 | ) | (355 | ) | 1,850 | (875 | ) | ||||||||||||
Change in cash and cash equivalents | (85 | ) | 889 | (718 | ) | — | 86 | ||||||||||||||
Cash and cash equivalents, beginning of year | 235 | 582 | 817 | — | 1,634 | ||||||||||||||||
Cash and cash equivalents, end of year | $ | 150 | $ | 1,471 | $ | 99 | $ | — | $ | 1,720 | |||||||||||
-1 | $125 million reflected as cash flows used by Parent consists of a loan from Parent to a Non-guarantor Subsidiary. | ||||||||||||||||||||
Condensed Consolidating Statements of Cash Flows | |||||||||||||||||||||
For the Year Ended December 31, 2011 | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Parent | Issuer | Non- | Total | Consolidated | |||||||||||||||||
guarantor | Consolidating | ||||||||||||||||||||
Subsidiaries | Adjustments | ||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||
Net income | $ | 1,116 | $ | 1,115 | $ | 659 | $ | (1,774 | ) | $ | 1,116 | ||||||||||
Adjustments to reconcile to net cash provided by operating activities: | |||||||||||||||||||||
Equity income from subsidiaries | (1,115 | ) | (659 | ) | — | 1,774 | — | ||||||||||||||
Depreciation and amortization | — | 37 | — | — | 37 | ||||||||||||||||
Pension, health and life insurance contributions | — | (42 | ) | — | — | (42 | ) | ||||||||||||||
Pension, health and life insurance benefits expense | — | 28 | — | — | 28 | ||||||||||||||||
Deferred income taxes | — | (16 | ) | 1 | — | (15 | ) | ||||||||||||||
Share-based compensation | — | 16 | — | — | 16 | ||||||||||||||||
Excess tax benefits from share-based arrangements | — | (4 | ) | — | — | (4 | ) | ||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||||||
Accounts and other receivables | (1 | ) | (873 | ) | (2 | ) | 877 | 1 | |||||||||||||
Accounts payable and accrued liabilities | 12 | (37 | ) | 869 | (877 | ) | (33 | ) | |||||||||||||
Settlement costs | — | 91 | — | — | 91 | ||||||||||||||||
Income taxes | — | (2 | ) | (4 | ) | (6 | ) | ||||||||||||||
Other current assets | — | (10 | ) | — | — | (10 | ) | ||||||||||||||
Other assets | — | (170 | ) | (213 | ) | 387 | 4 | ||||||||||||||
Return on investment in subsidiaries | 1,730 | 1,212 | — | (2,942 | ) | — | |||||||||||||||
Net cash provided by (used in) operating activities | 1,742 | 686 | 1,310 | (2,555 | ) | 1,183 | |||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||
Additions to plant and equipment | — | (56 | ) | — | — | (56 | ) | ||||||||||||||
Return of capital | 252 | — | — | (252 | ) | — | |||||||||||||||
Net cash provided by (used in) investing activities | 252 | (56 | ) | — | (252 | ) | (56 | ) | |||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||
Shares repurchased | (1,586 | ) | — | — | — | (1,586 | ) | ||||||||||||||
Proceeds from issuance of long-term debt | 387 | 750 | — | (387 | ) | 750 | |||||||||||||||
Dividends paid | (723 | ) | (1,982 | ) | (1,212 | ) | 3,194 | (723 | ) | ||||||||||||
Debt issuance costs | — | (9 | ) | — | — | (9 | ) | ||||||||||||||
Proceeds from exercise of stock options | — | 8 | — | — | 8 | ||||||||||||||||
Excess tax benefits from share-based arrangements | — | 4 | — | — | 4 | ||||||||||||||||
Net cash provided by (used in) financing activities | (1,922 | ) | (1,229 | ) | (1,212 | ) | 2,807 | (1,556 | ) | ||||||||||||
Change in cash and cash equivalents | 72 | (599 | ) | 98 | — | (429 | ) | ||||||||||||||
Cash and cash equivalents, beginning of year | 163 | 1,181 | 719 | — | 2,063 | ||||||||||||||||
Cash and cash equivalents, end of year | $ | 235 | $ | 582 | $ | 817 | $ | — | $ | 1,634 |
Legal_Proceedings_Tables
Legal Proceedings (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Number of Cases Pending | ' | ||||
The table below lists the number of certain tobacco-related cases pending against Lorillard as of the dates listed. A description of each type of case follows the table. | |||||
Type of Case | Total Number of Cases | ||||
Pending against Lorillard as | |||||
of February 14, 2014 | |||||
Conventional Product Liability Cases | 23 | ||||
Engle Progeny Cases | 4,197 | ||||
West Virginia Individual Personal Injury Cases | 38 | ||||
Flight Attendant Cases | 2,572 | ||||
Class Action Cases | 1 | ||||
Reimbursement Cases | 1 | ||||
Filter Cases | 62 | ||||
Tobacco-Related Antitrust Cases | 1 |
Significant_Accounting_Policie2
Significant Accounting Policies - Additional Information (Detail) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2009 |
Segment | ||||
Basis of Presentation [Line Items] | ' | ' | ' | ' |
Number of operating segments | 2 | ' | ' | ' |
Short-term liquid investments, maturity period | '90 days | ' | ' | ' |
Derivative agreements total notional amount | ' | ' | ' | $750 |
Percentage revenue from sales to single customer | 29.00% | 29.00% | 28.00% | ' |
Percentage of leaf tobacco purchased from one dealer | 86.00% | 90.00% | 88.00% | ' |
Advertising expense | 84 | 54 | 41 | ' |
Research and development costs | 21 | 20 | 22 | ' |
Pre-tax charges related to tobacco settlement costs | 1,241 | 1,379 | 1,307 | ' |
Legal costs | $146 | $160 | $140 | ' |
Newport | ' | ' | ' | ' |
Basis of Presentation [Line Items] | ' | ' | ' | ' |
Percentage of consolidated revenue from major brand | 85.40% | 87.00% | 88.40% | ' |
Buildings | ' | ' | ' | ' |
Basis of Presentation [Line Items] | ' | ' | ' | ' |
Estimated useful lives of property, plant and equipment | '40 years | ' | ' | ' |
Machinery and Equipment | Minimum | ' | ' | ' | ' |
Basis of Presentation [Line Items] | ' | ' | ' | ' |
Estimated useful lives of property, plant and equipment | '3 years | ' | ' | ' |
Machinery and Equipment | Maximum | ' | ' | ' | ' |
Basis of Presentation [Line Items] | ' | ' | ' | ' |
Estimated useful lives of property, plant and equipment | '12 years | ' | ' | ' |
Acquisitions_Additional_Inform
Acquisitions - Additional Information (Detail) | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 24, 2012 | Dec. 31, 2013 | Oct. 01, 2013 | Oct. 01, 2013 | Dec. 31, 2013 |
USD ($) | USD ($) | USD ($) | Blu eCigs | Blu eCigs | Blu eCigs | SKYCIG | SKYCIG | SKYCIG | SKYCIG | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | GBP (£) | Maximum | ||||
USD ($) | ||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business acquisition purchase price cash paid | ' | ' | ' | ' | ' | $135 | ' | $46 | £ 28 | ' |
Revenues | ' | ' | ' | 226 | 61 | ' | 4 | ' | ' | ' |
Acquisition-related expenses | ' | ' | ' | ' | 6 | ' | 4 | ' | ' | ' |
Operating income | 2,054 | 1,878 | 1,892 | 7 | 1 | ' | 7 | ' | ' | ' |
Contingent consideration | ' | ' | ' | ' | ' | ' | ' | 49 | 30 | ' |
Increase in total consideration to be transferred | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 |
Increase in purchase price and goodwill | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2 |
Fair_Values_of_Assets_Acquired
Fair Values of Assets Acquired and Liabilities Assumed (Detail) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Apr. 24, 2012 | Oct. 01, 2013 | Oct. 01, 2013 |
In Millions, unless otherwise specified | USD ($) | USD ($) | Blu eCigs | Blu eCigs | SKYCIG | SKYCIG |
USD ($) | USD ($) | USD ($) | GBP (£) | |||
Current assets: | ' | ' | ' | ' | ' | ' |
Accounts receivable | ' | ' | ' | $2 | $2 | ' |
Inventories | ' | ' | ' | 15 | ' | ' |
Total current assets | ' | ' | ' | 17 | ' | ' |
Goodwill | 102 | 64 | 0 | 64 | 38 | ' |
Intangible assets | ' | ' | ' | 58 | 35 | ' |
Total assets | ' | ' | ' | 139 | 75 | ' |
Current liabilities: | ' | ' | ' | ' | ' | ' |
Accounts and drafts payable | ' | ' | ' | 4 | 3 | ' |
Accrued liabilities | ' | ' | ' | ' | 1 | ' |
Total current liabilities | ' | ' | ' | ' | 4 | ' |
Earn out liability | ' | ' | ' | ' | 25 | ' |
Purchase price | ' | ' | ' | $135 | $46 | £ 28 |
Inventories_Additional_Informa
Inventories - Additional Information (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Inventory [Line Items] | ' | ' |
Manufactured stock in first-in, first-out basis | $85 | $41 |
Excess of average cost over stated value of inventories valued on LIFO basis | $264 | $245 |
Inventories_Detail
Inventories (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Inventory [Line Items] | ' | ' |
Leaf tobacco | $349 | $311 |
Manufactured stock | 143 | 94 |
Materials and supplies | 7 | 5 |
Inventories | $499 | $410 |
Other_Current_Assets_Detail
Other Current Assets (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Other Assets, Current [Line Items] | ' | ' |
Appeal bonds | $7 | $7 |
Deposits | 2 | 7 |
Other current assets | 14 | 6 |
Total | $23 | $20 |
Plant_and_Equipment_Stated_at_
Plant and Equipment Stated at Historical Cost (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Property, Plant, and Equipment Disclosure [Line Items] | ' | ' |
Land | $3 | $3 |
Buildings | 104 | 95 |
Equipment | 684 | 657 |
Total | 791 | 755 |
Accumulated depreciation | -475 | -457 |
Plant and equipment, net | $316 | $298 |
Plant_and_Equipment_Net_Additi
Plant and Equipment, Net - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Depreciation expense | $44 | $39 | $37 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets - Additional Information (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Apr. 24, 2012 | Apr. 24, 2012 | Oct. 01, 2013 | Dec. 31, 2013 | Oct. 01, 2013 |
In Millions, unless otherwise specified | Blu eCigs | Blu eCigs | Blu eCigs | SKYCIG | SKYCIG | SKYCIG | ||
Trademarks and Trade names | Maximum | Trademarks and Trade names | ||||||
Intangible Assets And Goodwill [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisition resulted in recognition of goodwill | $102 | $64 | $0 | $64 | ' | $38 | ' | ' |
Acquisition resulted in recognition of intangible assets | ' | ' | ' | 58 | 57 | 35 | ' | 33 |
Impairment of goodwill | ' | ' | 0 | ' | ' | ' | ' | ' |
Increase in total consideration to be transferred | ' | ' | ' | ' | ' | ' | 2 | ' |
Increase in purchase price and goodwill | ' | ' | ' | ' | ' | ' | $2 | ' |
Goodwill_Detail
Goodwill (Detail) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Goodwill [Line Items] | ' |
Beginning balance | $64 |
Purchase of SKYCIG | 38 |
Ending balance | $102 |
Intangible_Assets_Detail
Intangible Assets (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
In Millions, unless otherwise specified | Blu eCigs | Blu eCigs | SKYCIG | SKYCIG | ||
Trade Names And Trademarks Indefinite Lived | Non-compete Agreement and Technology | Non-compete Agreement and Customer List | Trademarks and Trade names | |||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' |
Amortizable intangible assets, weighted average amortization period | ' | ' | ' | '5 years | '5 years | '18 months |
Amortizable intangible assets, cost | ' | ' | ' | $1 | $2 | $34 |
Amortizable intangible assets, accumulated amortization | ' | ' | ' | 1 | ' | 6 |
Amortizable intangible assets, net carrying amount | 30 | ' | ' | ' | 2 | 28 |
Indefinite-lived intangible assets, net carrying amount | ' | ' | 57 | ' | ' | ' |
Intangible assets, net | $87 | $57 | ' | ' | ' | ' |
Other_Assets_Detail
Other Assets (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Other Assets [Line Items] | ' | ' |
Debt issuance costs, net | $26 | $26 |
Interest rate swap | 60 | 111 |
Prepaid pension | 55 | ' |
Other prepaid assets | 10 | 15 |
Total | $151 | $152 |
Accrued_Liabilities_Detail
Accrued Liabilities (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Millions, unless otherwise specified | ||||
Accrued liabilities | ' | ' | ||
Legal fees | $29 | $23 | ||
Salaries and other compensation | 20 | 19 | ||
Medical and other employee benefit plans | 30 | 33 | ||
Consumer rebates | 78 | 87 | ||
Sales promotion | 29 | 26 | ||
Accrued vendor charges | 3 | 19 | ||
Excise and other taxes | 57 | 63 | ||
Accrued interest | 34 | 33 | ||
Litigation related accruals | 42 | ' | ||
Other accrued liabilities | 55 | 53 | ||
Total | $377 | [1] | $356 | [1] |
[1] | Includes intercompany royalties between Issuer and non-guarantor subsidiaries of a corresponding amount. |
Future_Minimum_Rental_Payments
Future Minimum Rental Payments (Detail) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Future minimum rental payments | ' |
2014 | $2.30 |
2015 | 1.7 |
2016 | 0.8 |
2017 | 0.5 |
2018 | 0.5 |
2019 | 0.2 |
Net Minimum lease payments | $6 |
Commitments_Additional_Informa
Commitments - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Unrecorded Unconditional Purchase Obligation [Line Items] | ' | ' | ' |
Rental expense for operating leases | $5 | $4 | $5 |
Lorillard Tobacco | Machinery and Equipment | ' | ' | ' |
Unrecorded Unconditional Purchase Obligation [Line Items] | ' | ' | ' |
Approximate Contractual purchase obligations between January 1, 2014 and December 31, 2014 | 61 | ' | ' |
Lorillard Tobacco | Leaf Tobacco | ' | ' | ' |
Unrecorded Unconditional Purchase Obligation [Line Items] | ' | ' | ' |
Approximate Contractual purchase obligations between January 1, 2014 and December 31, 2014 | 90 | ' | ' |
Blu eCigs | Inventory | ' | ' | ' |
Unrecorded Unconditional Purchase Obligation [Line Items] | ' | ' | ' |
Approximate Contractual purchase obligations between January 1, 2014 and December 31, 2014 | 16 | ' | ' |
SKYCIG | ' | ' | ' |
Unrecorded Unconditional Purchase Obligation [Line Items] | ' | ' | ' |
Approximate Contractual purchase obligations between January 1, 2014 and December 31, 2014 | $0 | ' | ' |
Assets_and_Liabilities_Measure
Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Cash and Cash Equivalents: | ' | ' |
Total cash and cash equivalents | $1,454 | $1,720 |
Derivative Asset: | ' | ' |
Total derivative asset | ' | 111 |
Short-term investments: | ' | ' |
Total short-term investments | 157 | ' |
Long-term investments: | ' | ' |
Total long-term investments | 93 | ' |
SKYCIG | Earn out liability | ' | ' |
Other liabilities: | ' | ' |
Total other liabilities | 25 | ' |
Prime money market funds | ' | ' |
Cash and Cash Equivalents: | ' | ' |
Total cash and cash equivalents | 1,454 | 1,720 |
Corporate debt securities | ' | ' |
Short-term investments: | ' | ' |
Total short-term investments | 63 | ' |
Long-term investments: | ' | ' |
Total long-term investments | 86 | ' |
Agency obligations | ' | ' |
Short-term investments: | ' | ' |
Total short-term investments | 59 | ' |
Long-term investments: | ' | ' |
Total long-term investments | 7 | ' |
Commercial paper | ' | ' |
Short-term investments: | ' | ' |
Total short-term investments | 22 | ' |
International government obligations | ' | ' |
Short-term investments: | ' | ' |
Total short-term investments | 13 | ' |
Interest rate swaps - fixed to floating rate | ' | ' |
Derivative Asset: | ' | ' |
Total derivative asset | 60 | 111 |
Level 1 | ' | ' |
Cash and Cash Equivalents: | ' | ' |
Total cash and cash equivalents | 1,454 | 1,720 |
Level 1 | Prime money market funds | ' | ' |
Cash and Cash Equivalents: | ' | ' |
Total cash and cash equivalents | 1,454 | 1,720 |
Level 2 | ' | ' |
Derivative Asset: | ' | ' |
Total derivative asset | ' | 111 |
Short-term investments: | ' | ' |
Total short-term investments | 157 | ' |
Long-term investments: | ' | ' |
Total long-term investments | 93 | ' |
Level 2 | Corporate debt securities | ' | ' |
Short-term investments: | ' | ' |
Total short-term investments | 63 | ' |
Long-term investments: | ' | ' |
Total long-term investments | 86 | ' |
Level 2 | Agency obligations | ' | ' |
Short-term investments: | ' | ' |
Total short-term investments | 59 | ' |
Long-term investments: | ' | ' |
Total long-term investments | 7 | ' |
Level 2 | Commercial paper | ' | ' |
Short-term investments: | ' | ' |
Total short-term investments | 22 | ' |
Level 2 | International government obligations | ' | ' |
Short-term investments: | ' | ' |
Total short-term investments | 13 | ' |
Level 2 | Interest rate swaps - fixed to floating rate | ' | ' |
Derivative Asset: | ' | ' |
Total derivative asset | 60 | 111 |
Level 3 | SKYCIG | Earn out liability | ' | ' |
Other liabilities: | ' | ' |
Total other liabilities | $25 | ' |
Fair_Value_Additional_Informat
Fair Value - Additional Information (Detail) | 12 Months Ended | |||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
USD ($) | USD ($) | SKYCIG | SKYCIG | SKYCIG | SKYCIG | SKYCIG | SKYCIG | |
USD ($) | GBP (£) | Minimum | Minimum | Maximum | Maximum | |||
USD ($) | GBP (£) | USD ($) | GBP (£) | |||||
Fair Value Measurements Disclosure [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from sales, maturities and calls of available for sale securities | $26 | $0 | ' | ' | ' | ' | ' | ' |
Realized gains and losses on sales, maturities and calls of available for sale securities | ' | 0 | ' | ' | ' | ' | ' | ' |
Fair value of earn out liability | ' | ' | 25 | 15 | ' | ' | ' | ' |
Earn Out that will be ultimately paid | ' | ' | ' | ' | $0 | £ 0 | $49 | £ 30 |
Credit_Agreement_Additional_In
Credit Agreement - Additional Information (Detail) (USD $) | 12 Months Ended | 1 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Jul. 10, 2012 | Mar. 26, 2010 |
Old Revolving Credit Facility | |||
Debt [Line Items] | ' | ' | ' |
Revolving credit facility | ' | $200 | $185 |
Credit facility maturity term | ' | ' | '3 years |
Revolving credit facility, initiation date | 10-Jul-12 | ' | ' |
Revolving credit facility, expiration date | 10-Jul-17 | ' | ' |
Revolving credit facility, increase, additional borrowing | $300 | ' | ' |
Ratio of Debt to EBITDA to be maintained as per Revolver requirement | 'not more than 2.25 to 1 | ' | ' |
Ratio of EBITDA to interest expense to be maintained as per Revolver requirement | 'not less than 3.0 to 1 | ' | ' |
Maximum ratio of debt to EBITDA | 2.25% | ' | ' |
Minimum ratio of EBITDA | 3.00% | ' | ' |
LongTerm_Debt_Detail
Long-Term Debt (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Debt Instrument [Line Items] | ' | ' |
Total long-term debt | $3,560 | $3,111 |
2016 Notes - 3.500% Notes due 2016 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Senior Long Term Notes | 500 | 500 |
2017 Notes - 2.300% Notes due 2017 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Senior Long Term Notes | 500 | 500 |
2019 Notes - 8.125% Notes due 2019 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Senior Long Term Notes | 810 | 861 |
2020 Notes - 6.875% Notes due 2020 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Senior Long Term Notes | 750 | 750 |
2023 Notes - 3.750% Notes due 2023 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Senior Long Term Notes | 500 | ' |
2040 Notes - 8.125% Notes due 2040 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Senior Long Term Notes | 250 | 250 |
2041 Notes - 7.000% Notes due 2041 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Senior Long Term Notes | $250 | $250 |
LongTerm_Debt_Additional_Infor
Long-Term Debt - Additional Information (Detail) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | |||||||
In Millions, unless otherwise specified | Aug. 04, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Aug. 04, 2011 | Aug. 04, 2011 | Aug. 21, 2012 | Jun. 30, 2009 | Dec. 31, 2013 | Apr. 30, 2010 | Apr. 30, 2010 | 31-May-13 |
Tranche | Lorillard Tobacco | 2016 Notes - 3.500% Notes due 2016 | 2041 Notes - 7.000% Notes due 2041 | 2017 Notes - 2.300% Notes due 2017 | 2019 Notes - 8.125% Notes due 2019 | 2019 Notes - 8.125% Notes due 2019 | 2020 Notes - 6.875% Notes due 2020 | 2040 Notes - 8.125% Notes due 2040 | 2023 Notes - 3.750% Notes due 2023 | |||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of unsecured senior notes | $750 | ' | ' | ' | $500 | $250 | $500 | $750 | ' | $750 | $250 | $500 |
Unsecured senior debt stated interest rate percent | ' | ' | ' | ' | 3.50% | 7.00% | 2.30% | 8.13% | ' | 6.88% | 8.13% | 3.75% |
Number of tranches issued | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument maturity date | ' | ' | ' | ' | 4-Aug-16 | 4-Aug-41 | 21-Aug-17 | ' | ' | ' | ' | 20-May-23 |
Percentage of ownership interest in subsidiary | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum incremental increase in interest rate on the notes | ' | ' | ' | ' | ' | ' | ' | ' | 0.25% | ' | ' | ' |
Maximum incremental increase in interest rate on the notes | ' | ' | ' | ' | ' | ' | ' | ' | 2.00% | ' | ' | ' |
Debt instrument description | ' | ' | ' | ' | ' | ' | ' | ' | 'The interest rate payable on the 2019 Notes is subject to incremental increases from 0.25% to 2.00% in the event either Moody's Investors Services, Inc. ("Moody's"), Standard & Poor's Ratings Services ("S&P") or both Moody's and S&P downgrade the 2019 Notes below investment grade (Baa3 and BBB- for Moody's and S&P, respectively). As of December 31, 2013, our debt ratings were Baa2 and BBB- with Moody's and S&P, respectively, both of which are investment grade. | ' | ' | ' |
Offer to repurchase notes upon change of control triggering event | ' | 101.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of days ceased to be rated investment grade for becoming change of control triggering event | ' | '60 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Carrying value of notes | ' | 3,560 | 3,111 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated fair value of notes | ' | $3,872 | $3,512 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative_Instruments_Additio
Derivative Instruments - Additional Information (Detail) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2009 |
Debt Instrument [Line Items] | ' | ' | ' | ' |
Notional amount of interest rate swap | ' | ' | ' | $750 |
Fixed interest rate under interest rate swap agreement | ' | ' | ' | 8.13% |
Spread on variable rate based on one month LIBOR | ' | ' | ' | 4.63% |
Variable interest rate | 4.79% | 4.84% | ' | ' |
Reduction in interest expense | 24 | 24 | 24 | ' |
Interest rate swap agreements expiration date | '2019-06 | ' | ' | ' |
Fair value of the interest rate swaps | ' | 111 | ' | ' |
2019 Notes - 8.125% Notes due 2019 | ' | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' | ' |
Adjusted carrying amounts of hedged debt outstanding | 810 | 861 | ' | ' |
Other Assets | ' | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' | ' |
Fair value of the interest rate swaps | $60 | $111 | ' | ' |
Basic_and_Diluted_Earnings_Per
Basic and Diluted Earnings Per Share (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Numerator: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income, as reported | $281 | $258 | $313 | $328 | $309 | $283 | $284 | $223 | $1,180 | $1,099 | $1,116 |
Less: Net income attributable to participating securities | ' | ' | ' | ' | ' | ' | ' | ' | -3 | -3 | -3 |
Net income available to common shareholders | ' | ' | ' | ' | ' | ' | ' | ' | $1,177 | $1,096 | $1,113 |
Denominator: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic EPS - weighted average shares | 366.53 | 371.01 | 375.86 | 378.62 | 384.87 | 390.21 | 390.53 | 391.45 | 372.96 | 389.27 | 417.32 |
Effect of dilutive securities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Options and SARS | ' | ' | ' | ' | ' | ' | ' | ' | 0.75 | 0.86 | 0.74 |
Diluted EPS - adjusted weighted average shares and assumed conversions | 367.19 | 371.77 | 376.61 | 379.42 | 385.59 | 391.05 | 391.44 | 392.4 | 373.71 | 390.13 | 418.06 |
Earnings Per Share: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic | ' | ' | ' | ' | ' | ' | ' | ' | $3.15 | $2.82 | $2.67 |
Diluted | $0.76 | $0.69 | $0.83 | $0.86 | $0.80 | $0.72 | $0.72 | $0.57 | $3.15 | $2.81 | $2.66 |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2011 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' |
Shares of common stock excluded from diluted earnings per share calculation | 0.1 |
Provision_Benefit_for_Income_T
Provision (Benefit) for Income Taxes (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Current | ' | ' | ' |
Federal | $606 | $530 | $548 |
State | 140 | 111 | 120 |
Foreign | ' | ' | ' |
Deferred | ' | ' | ' |
Federal | -36 | -10 | -10 |
State | -5 | -2 | -4 |
Foreign | -1 | ' | ' |
Total | $704 | $629 | $654 |
PreTax_Income_Loss_for_Domesti
Pre-Tax Income (Loss) for Domestic and Foreign Operations (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Schedule of Income Before Income Tax [Line Items] | ' | ' | ' |
Domestic | $1,891 | $1,728 | $1,770 |
Foreign | -7 | ' | ' |
Income before income taxes | $1,884 | $1,728 | $1,770 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income Taxes [Line Items] | ' | ' | ' |
Total income tax expense using statutory U.S. federal income tax rate | $659 | $605 | $620 |
Statutory rate | 35.00% | 35.00% | 35.00% |
Tax benefits that, if recognized, would affect effective tax rate | 34 | 27 | 28 |
Expense in interest and penalties related to unrecognized tax benefits | 2 | 2 | 2 |
Accrued interest and penalties related to unrecognized tax benefits | 19 | 16 | ' |
Expected decrease in gross unrecognized tax benefits in next twelve months | $12 | ' | ' |
Reconciliation_Between_Statuto
Reconciliation Between Statutory Federal Income Tax Rate and Effective Income Tax Rate as Percentage of Income (Detail) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Schedule of Effective Tax Rate Reconciliation [Line Items] | ' | ' | ' |
Statutory rate | 35.00% | 35.00% | 35.00% |
Increase (decrease) in rate resulting from: | ' | ' | ' |
State taxes | 4.70% | 4.10% | 4.30% |
Domestic manufacturer's deduction | -2.70% | -2.80% | -2.40% |
Other | 0.40% | 0.10% | 0.10% |
Effective rate | 37.40% | 36.40% | 37.00% |
Deferred_Tax_Assets_Liabilitie
Deferred Tax Assets (Liabilities) (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Deferred tax assets: | ' | ' |
Employee benefits | $137 | $161 |
Settlement costs | 525 | 511 |
State and local income taxes | 22 | 18 |
Litigation and legal | 24 | 6 |
Inventory | 3 | 4 |
Other | 3 | 2 |
Gross deferred tax assets | 714 | 702 |
Deferred tax liabilities: | ' | ' |
Depreciation | -66 | -63 |
Federal effect of state deferred taxes | -42 | -34 |
Gross deferred tax liabilities | -108 | -97 |
Net deferred tax assets | $606 | $605 |
Reconciliation_of_Beginning_an
Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Schedule of Unrecognized Tax Benefits [Line Items] | ' | ' | ' |
Balance at January 1, | $41 | $42 | $33 |
Additions for tax positions of prior years | 4 | 4 | 6 |
Reductions for tax positions of prior years | -2 | -6 | -2 |
Additions based on tax positions related to the current year | 10 | 9 | 9 |
Settlements | ' | -4 | -1 |
Lapse of statute of limitations | -1 | -4 | -3 |
Balance at December 31, | $52 | $41 | $42 |
Weighted_Average_Assumptions_U
Weighted - Average Assumptions Used to Determine Benefit Obligations (Detail) | Dec. 31, 2013 | Dec. 31, 2012 |
Pension Benefits | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Rate of compensation increase | 4.25% | 4.25% |
Pension Benefits | Minimum | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Discount rate | 4.70% | 3.90% |
Pension Benefits | Maximum | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Discount rate | 4.90% | 4.25% |
Other Postretirement Benefits | Minimum | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Discount rate | 4.60% | 3.90% |
Other Postretirement Benefits | Maximum | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Discount rate | 4.70% | 4.00% |
Weighted_Average_Assumptions_U1
Weighted - Average Assumptions Used to Determine Net Periodic Benefit Cost (Detail) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Pension Benefits | ' | ' | ' |
Schedule of Net Periodic Benefit Costs Weighted Average Assumptions [Line Items] | ' | ' | ' |
Expected long-term return on plan assets | 7.75% | 7.75% | 7.50% |
Rate of compensation increase | 4.25% | 4.75% | 4.75% |
Pension Benefits | Minimum | ' | ' | ' |
Schedule of Net Periodic Benefit Costs Weighted Average Assumptions [Line Items] | ' | ' | ' |
Discount rate | 3.90% | 4.70% | 5.40% |
Pension Benefits | Maximum | ' | ' | ' |
Schedule of Net Periodic Benefit Costs Weighted Average Assumptions [Line Items] | ' | ' | ' |
Discount rate | 4.25% | 4.90% | 5.75% |
Other Postretirement Benefits | Minimum | ' | ' | ' |
Schedule of Net Periodic Benefit Costs Weighted Average Assumptions [Line Items] | ' | ' | ' |
Discount rate | 3.90% | 4.60% | 5.25% |
Other Postretirement Benefits | Maximum | ' | ' | ' |
Schedule of Net Periodic Benefit Costs Weighted Average Assumptions [Line Items] | ' | ' | ' |
Discount rate | 4.00% | 4.80% | 5.50% |
Assumed_Health_Care_Cost_Trend
Assumed Health Care Cost Trend Rates for Other Post Retirement Benefits (Detail) (Other Postretirement Benefits) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ' | ' |
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 4.50% | 4.50% |
Pre-65 | ' | ' |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ' | ' |
Health care cost trend rate assumed for next year | 8.00% | 8.50% |
Year that the rate reaches the ultimate trend rate: | ' | ' |
Rate reaches ultimate trend rate, year | '2021 | '2021 |
Post-65 | ' | ' |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ' | ' |
Health care cost trend rate assumed for next year | 6.00% | 6.00% |
Year that the rate reaches the ultimate trend rate: | ' | ' |
Rate reaches ultimate trend rate, year | '2021 | '2021 |
OnePercentPoint_Change_in_Assu
One-Percent-Point Change in Assumed Health Care Cost Trend Rates Effects (Detail) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ' |
Effect of one percentage point increase on post retirement benefit obligations | $15 |
Effect of one percentage point increase on total of services and interest cost | 2 |
Effect of one percentage point decrease on post retirement benefit obligations | 12 |
Effect of one percentage point decrease on total of services and interest cost | $1 |
Net_Periodic_Pension_and_Other
Net Periodic Pension and Other Postretirement Benefit Cost (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Pension Benefits | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Service cost | $26 | $24 | $18 |
Interest cost | 51 | 55 | 56 |
Expected return on plan assets | -82 | -76 | -73 |
Amortization of unrecognized net loss (gain) | 21 | 22 | 8 |
Amortization of unrecognized prior service cost | 4 | 4 | 4 |
Net periodic benefit cost | 20 | 29 | 13 |
Other Postretirement Benefits | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Service cost | 6 | 5 | 4 |
Interest cost | 9 | 10 | 10 |
Amortization of unrecognized net loss (gain) | 1 | ' | ' |
Amortization of unrecognized prior service cost | ' | -1 | -1 |
Net periodic benefit cost | $16 | $14 | $13 |
Reconciliation_of_Benefit_Obli
Reconciliation of Benefit Obligations, Plan Assets and Funded Status of Pension and Postretirement Plans (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ' | ' | ' |
Fair value beginning balance | $1,078 | ' | ' |
Fair value ending balance | 1,134 | 1,078 | ' |
Noncurrent liabilities | -305 | -409 | ' |
Total recognized net periodic benefit cost and other comprehensive (income) loss | 36 | 44 | 28 |
Pension Benefits | ' | ' | ' |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ' | ' | ' |
Benefit obligation beginning balance | 1,265 | 1,183 | ' |
Service cost | 26 | 24 | 18 |
Interest cost | 51 | 55 | 56 |
Actuarial (gain) loss | -98 | 66 | ' |
Benefits paid | -65 | -63 | ' |
Benefit obligation ending balance | 1,179 | 1,265 | 1,183 |
Fair value beginning balance | 1,078 | 998 | ' |
Actual return on plan assets | 90 | 112 | ' |
Employer contributions | 31 | 31 | ' |
Benefits paid from plan assets | -65 | -63 | ' |
Fair value ending balance | 1,134 | 1,078 | 998 |
Funded status | -45 | -187 | ' |
Noncurrent assets | 55 | ' | ' |
Noncurrent liabilities | -100 | -187 | ' |
Net amount recognized | -45 | -187 | ' |
Net actuarial (gain) loss | -107 | 30 | ' |
Recognized actuarial gain (loss) | -21 | -22 | ' |
Recognized prior service cost | -4 | -4 | ' |
Total recognized in other comprehensive (income) loss | -132 | 4 | ' |
Total recognized net periodic benefit cost and other comprehensive (income) loss | -112 | 33 | ' |
Other Postretirement Benefits | ' | ' | ' |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ' | ' | ' |
Benefit obligation beginning balance | 230 | 212 | ' |
Service cost | 6 | 5 | 4 |
Interest cost | 9 | 10 | 10 |
Plan participants' contributions | 5 | 5 | ' |
Amendments | ' | 2 | ' |
Actuarial (gain) loss | -19 | 12 | ' |
Benefits paid | -18 | -18 | ' |
Other | ' | 2 | ' |
Benefit obligation ending balance | 213 | 230 | 212 |
Employer contributions | 13 | 13 | ' |
Plan participants' contributions | 5 | 5 | ' |
Benefits paid from plan assets | -18 | -18 | ' |
Funded status | -213 | -230 | ' |
Current liabilities | -14 | -14 | ' |
Noncurrent liabilities | -199 | -216 | ' |
Net amount recognized | -213 | -230 | ' |
Net actuarial (gain) loss | -19 | 12 | ' |
Recognized actuarial gain (loss) | -1 | ' | ' |
Prior service cost | ' | 2 | ' |
Total recognized in other comprehensive (income) loss | -20 | 14 | ' |
Total recognized net periodic benefit cost and other comprehensive (income) loss | ($4) | $28 | ' |
Pension_Plans_with_Accumulated
Pension Plans with Accumulated Benefit Obligation in Excess of Plan Assets (Detail) (Pension Benefits, USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Pension Benefits | ' | ' |
Schedule of Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets [Line Items] | ' | ' |
Projected benefit obligation | $682 | $1,265 |
Accumulated benefit obligation | 615 | 1,189 |
Fair value of plan assets | $582 | $1,078 |
Estimated_Amount_to_be_Recogni
Estimated Amount to be Recognized from Accumulated Other Comprehensive Income into Net Periodic Benefit Cost (Detail) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Pension Benefits | ' |
Schedule Of Accumulated Benefit Obligations In Excess Of Fair Value Of Plan Assets And Amounts Recognized In Balance Sheet And In Other Comprehensive Income Loss [Line Items] | ' |
Amortization of actuarial (gain) loss | $9 |
Amortization of prior service cost | 3 |
Total estimated amounts to be recognized | 12 |
Other Postretirement Benefits | ' |
Schedule Of Accumulated Benefit Obligations In Excess Of Fair Value Of Plan Assets And Amounts Recognized In Balance Sheet And In Other Comprehensive Income Loss [Line Items] | ' |
Amortization of actuarial (gain) loss | -1 |
Total estimated amounts to be recognized | ($1) |
Expected_Future_Minimum_Benefi
Expected Future Minimum Benefit Payments (Detail) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Schedule of Postemployment Expected Future Benefit Payments [Line Items] | ' |
2014 | $83 |
2015 | 86 |
2016 | 88 |
2017 | 89 |
2018 | 92 |
2019 - 2023 | 485 |
Defined Benefit Plan, Expected Future Benefit Payment, Total | 923 |
Pension Benefits | ' |
Schedule of Postemployment Expected Future Benefit Payments [Line Items] | ' |
2014 | 69 |
2015 | 71 |
2016 | 73 |
2017 | 74 |
2018 | 76 |
2019 - 2023 | 404 |
Defined Benefit Plan, Expected Future Benefit Payment, Total | 767 |
Other Postretirement Benefit Payments Gross | ' |
Schedule of Postemployment Expected Future Benefit Payments [Line Items] | ' |
2014 | 15 |
2015 | 16 |
2016 | 16 |
2017 | 16 |
2018 | 17 |
2019 - 2023 | 83 |
Defined Benefit Plan, Expected Future Benefit Payment, Total | 163 |
Less Medicare Drug Subsidy | ' |
Schedule of Postemployment Expected Future Benefit Payments [Line Items] | ' |
2014 | 1 |
2015 | 1 |
2016 | 1 |
2017 | 1 |
2018 | 1 |
2019 - 2023 | 2 |
Defined Benefit Plan, Expected Future Benefit Payment, Total | $7 |
Retirement_Plans_Additional_In
Retirement Plans - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Pension Benefits | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Defined benefit plan expected contributions for next year | $1 | ' | ' |
Contribution under plan | 31 | 31 | ' |
Other Postretirement Benefits | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Defined benefit plan expected contributions for next year | 15 | ' | ' |
Contribution under plan | 13 | 13 | ' |
Profit Sharing Plan | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Contribution under plan | 11 | 11 | 11 |
Maximum contribution as percentage of participants' earnings | 15.00% | ' | ' |
Savings Plan | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Contribution under plan | $5 | $5 | $5 |
Employer matching contribution to plan | 'Provides a matching contribution of 100% of the first 3% of pay contributed and 50% of the next 2% of pay contributed by employees. | ' | ' |
Savings Plan | First 3% of pay contributed | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Employer matching contribution percentage | 100.00% | ' | ' |
Savings Plan | Next 2% of pay contributed | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Employer matching contribution percentage | 50.00% | ' | ' |
Pension_Plans_Asset_Allocation
Pension Plans Asset Allocations (Detail) | Dec. 31, 2013 | Dec. 31, 2012 |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Pension plan asset allocations | 100.00% | 100.00% |
U.S. Equity | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Pension plan asset allocations | 9.40% | 10.60% |
Global ex U.S. Equity | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Pension plan asset allocations | 9.60% | 8.00% |
Global ex Emerging Markets Equity | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Pension plan asset allocations | 4.70% | 3.80% |
Emerging Markets Equity | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Pension plan asset allocations | 3.90% | 3.70% |
Absolute Return Hedge Funds | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Pension plan asset allocations | 16.60% | 13.90% |
Equity Hedge Funds | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Pension plan asset allocations | 13.60% | 11.40% |
Private Equity | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Pension plan asset allocations | 4.50% | 4.70% |
Private Real Assets | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Pension plan asset allocations | 2.90% | 2.20% |
Public Real Assets | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Pension plan asset allocations | 2.00% | 2.30% |
Fixed Income | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Pension plan asset allocations | 29.50% | 37.30% |
Cash Equivalents | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Pension plan asset allocations | 3.30% | 2.10% |
Plan_Assets_Using_Fair_Value_H
Plan Assets Using Fair Value Hierarchy (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | $1,134 | $1,078 |
U.S. Equity | Securities | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 111 | 122 |
U.S. Equity | Overlay derivatives liabilities | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | -5 | -8 |
Global ex U.S. Equity | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 109 | ' |
Global ex U.S. Equity | Securities | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | ' | 93 |
Global ex U.S. Equity | Overlay derivatives liabilities | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | ' | -6 |
Global ex Emerging Markets Equity | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 53 | 41 |
Emerging Markets Equity | Securities | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 28 | 43 |
Emerging Markets Equity | Overlay derivatives liabilities | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | ' | -3 |
Emerging Markets Equity | Overlay derivatives assets | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 17 | ' |
Absolute Return Hedge Funds | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 188 | 150 |
Equity Hedge Funds | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 155 | 123 |
Private Equity | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 51 | 51 |
Private Real Assets | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 33 | 24 |
Public Real Assets | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 22 | 23 |
Fixed Income | Securities | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 346 | 375 |
Fixed Income | Overlay derivatives liabilities | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | -12 | 27 |
Cash Equivalents | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 38 | 23 |
Level 1 | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 15 | 290 |
Level 1 | U.S. Equity | Securities | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 15 | 49 |
Level 1 | Fixed Income | Securities | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | ' | 241 |
Level 2 | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 644 | 379 |
Level 2 | U.S. Equity | Overlay derivatives liabilities | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | -5 | -8 |
Level 2 | Global ex U.S. Equity | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 109 | ' |
Level 2 | Global ex U.S. Equity | Securities | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | ' | 93 |
Level 2 | Global ex U.S. Equity | Overlay derivatives liabilities | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | ' | -6 |
Level 2 | Global ex Emerging Markets Equity | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 31 | 25 |
Level 2 | Emerging Markets Equity | Securities | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 28 | 43 |
Level 2 | Emerging Markets Equity | Overlay derivatives liabilities | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | ' | -3 |
Level 2 | Emerging Markets Equity | Overlay derivatives assets | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 17 | ' |
Level 2 | Absolute Return Hedge Funds | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 58 | 40 |
Level 2 | Equity Hedge Funds | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 74 | 62 |
Level 2 | Public Real Assets | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 22 | 14 |
Level 2 | Fixed Income | Securities | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 284 | 69 |
Level 2 | Fixed Income | Overlay derivatives liabilities | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | -12 | 27 |
Level 2 | Cash Equivalents | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 38 | 23 |
Level 3 | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 475 | 409 |
Level 3 | U.S. Equity | Securities | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 96 | 73 |
Level 3 | Global ex Emerging Markets Equity | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 22 | 16 |
Level 3 | Absolute Return Hedge Funds | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 130 | 110 |
Level 3 | Equity Hedge Funds | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 81 | 61 |
Level 3 | Private Equity | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 51 | 51 |
Level 3 | Private Real Assets | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | 33 | 24 |
Level 3 | Public Real Assets | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | ' | 9 |
Level 3 | Fixed Income | Securities | ' | ' |
Fair Value Hierarchy Of Plan Assets By Category [Line Items] | ' | ' |
Fair value of plan assets | $62 | $65 |
Reconciliation_of_Level_Three_
Reconciliation of Level Three Assets (Detail) (Level 3 Assets, USD $) | 12 Months Ended | 12 Months Ended | ||||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 |
U.S. Equity | U.S. Equity | Global ex Emerging Markets Equity | Global ex Emerging Markets Equity | Absolute Return Hedge Funds | Absolute Return Hedge Funds | Equity Hedge Funds | Equity Hedge Funds | Private Equity | Private Equity | Private Real Assets | Private Real Assets | Public Real Assets | Public Real Assets | Fixed Income | Fixed Income | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning Balance | $73 | $66 | $16 | ' | $110 | $80 | $61 | $50 | $51 | $47 | $24 | $16 | $9 | $9 | $65 | ' |
Realized Gains/ (Losses) | -1 | ' | ' | ' | 2 | 2 | ' | ' | 3 | 1 | 2 | 1 | -1 | ' | ' | ' |
Unrealized Gains/ (Losses) | 23 | 12 | 6 | 1 | 16 | 7 | 11 | 2 | 5 | 5 | 4 | 1 | 1 | ' | -3 | ' |
Purchases | 9 | ' | ' | 15 | 12 | 29 | 25 | 13 | 6 | 9 | 11 | 10 | ' | ' | ' | 65 |
Sales | -8 | -5 | ' | ' | -10 | -8 | -16 | -4 | -14 | -10 | -8 | -4 | -9 | ' | ' | ' |
Net Transfers Into/(Out of) Level 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | -1 | ' | ' | ' | ' | ' | ' |
Ending Balance | $96 | $73 | $22 | $16 | $130 | $110 | $81 | $61 | $51 | $51 | $33 | $24 | ' | $9 | $62 | $65 |
ShareBased_Compensation_Additi
Share-Based Compensation - Additional Information (Detail) (USD $) | 12 Months Ended | 24 Months Ended | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
Stock Option and Stock Appreciation Rights | Stock Option and Stock Appreciation Rights | Stock Option and Stock Appreciation Rights | Stock Option and Stock Appreciation Rights | Stock Option and Stock Appreciation Rights | Stock Option and Stock Appreciation Rights | Non-qualified Stock Options | Non-qualified Stock Options | Stock Appreciation Right | Restricted Stock Unit (RSUs) | Restricted Stock Unit (RSUs) | Restricted Stock Unit (RSUs) | Restricted Stock Unit (RSUs) | Restricted Stock Unit (RSUs) | Restricted Stock Unit (RSUs) | Restricted Stock Unit (RSUs) | Restricted Stock Unit (RSUs) | Restricted Stock Unit (RSUs) | Employee Stock Purchase Plan | Lorillard Plan | Lorillard Plan | Lorillard Plan | ||
Maximum | Minimum | Non Vested | Maximum | Minimum | Employees | Director | Performance-Based Units | Performance-Based Units | Carolina Group Plan | Stock Options and Stock Appreciation Rights | |||||||||||||
Maximum | |||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate number shares of common stock available for grant | ' | 4,690,378 | 4,375,683 | 4,270,449 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11,144,475 | 2,144,475 | 1,500,000 |
Vesting period | ' | ' | ' | ' | '10 years | '4 years | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | '3 years | '1 year | ' | ' | ' | ' | ' | ' |
Stock awarded | ' | ' | ' | ' | ' | ' | ' | 1,790,244 | ' | ' | 217,216 | 210,891 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Awards outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 1,252,410 | 777,172 | 219,211 | 207,339 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average remaining contractual term of awards outstanding | ' | '5 years 11 months 5 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average remaining contractual term of awards vested | ' | '5 years 5 months 16 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate intrinsic value of awards outstanding | ' | $44,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate intrinsic value of awards vested | ' | 32,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total intrinsic value of awards exercised | ' | 31,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation | ' | 2,000,000 | 5,000,000 | 5,000,000 | ' | ' | ' | ' | ' | ' | 16,000,000 | 15,000,000 | 11,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income tax benefit recognized under compensation plan | ' | 1,000,000 | 1,000,000 | 2,000,000 | ' | ' | ' | ' | ' | ' | 5,000,000 | 5,000,000 | 4,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Compensation cost awards not yet recognized | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | 16,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Compensation cost awards recognition period | ' | ' | ' | ' | ' | ' | '1 year 26 days | ' | ' | ' | '1 year 8 months 27 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected volatility description | 'The expected volatility is based upon the implied volatility of traded call options on the Company's Stock with remaining maturities of greater than 180 days. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected volatility minimum term | '180 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Performance period to receive restricted shares of common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Award percentage of target based on pre-established financial performance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200.00% | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Total fair value of award granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $9 | $9 | ' | ' | ' | ' |
Total market value of awards outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $11 | $8 | ' | ' | ' | ' |
Price of common stock as percentage of fair market fair market value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 95.00% | ' | ' | ' |
Maximum number of shares available for purchase by eligible employees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,500,000 | ' | ' | ' |
Purchase of common stock from initial offering period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 28-Feb-13 | ' | ' | ' |
Summary_of_Stock_Option_and_St
Summary of Stock Option and Stock Appreciation Rights Transactions (Detail) (Stock Option and Stock Appreciation Rights, USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Stock Option and Stock Appreciation Rights | ' | ' | ' |
Number of Awards | ' | ' | ' |
Awards outstanding at beginning of period | 3,434,256 | 4,388,862 | 4,428,339 |
Granted | ' | ' | 1,026,060 |
Exercised | -1,404,674 | -930,156 | -1,040,094 |
Forfeited | ' | -20,631 | -25,443 |
Expired | ' | -3,819 | ' |
Awards outstanding at end of period | 2,029,582 | 3,434,256 | 4,388,862 |
Awards exercisable at end of period | 1,350,409 | 1,760,898 | 1,505,325 |
Awards available for grant at end of period | 4,690,378 | 4,375,683 | 4,270,449 |
Weighted Average Exercise Price | ' | ' | ' |
Awards outstanding at beginning of period | $26.95 | $25.94 | $23.19 |
Granted | ' | ' | $34.37 |
Exercised | $24.10 | $22.28 | $22.65 |
Forfeited | ' | $23.62 | $23.72 |
Expired | ' | $23.53 | ' |
Awards outstanding at end of period | $28.92 | $26.95 | $25.94 |
Awards exercisable at end of period | $27.31 | $25.05 | $22.23 |
Shares available for grant, December 31 | ' | ' | ' |
Information_about_Stock_Option
Information about Stock Options and Stock Appreciation Rights Outstanding (Detail) (Stock Option and Stock Appreciation Rights, USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' | ' | ' |
Number of Shares, Outstanding | 2,029,582 | 3,434,256 | 4,388,862 | 4,428,339 |
Weighted Average Remaining Contractual Life | '5 years 11 months 5 days | ' | ' | ' |
Awards Outstanding, Weighted Average Exercise Price | $28.92 | $26.95 | $25.94 | $23.19 |
6.67 - 11.66 | ' | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' | ' | ' |
Range of Exercise Prices, Lower Limit | $6.67 | ' | ' | ' |
Range of Exercise Prices, Upper Limit | $11.66 | ' | ' | ' |
Number of Shares, Outstanding | 3,000 | ' | ' | ' |
Weighted Average Remaining Contractual Life | '1 year 1 month 6 days | ' | ' | ' |
Awards Outstanding, Weighted Average Exercise Price | $10.84 | ' | ' | ' |
Number of Shares, Vested | 3,000 | ' | ' | ' |
Awards Vested, Weighted Average Exercise Price | $10.84 | ' | ' | ' |
11.67 - 16.66 | ' | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' | ' | ' |
Range of Exercise Prices, Lower Limit | $11.67 | ' | ' | ' |
Range of Exercise Prices, Upper Limit | $16.66 | ' | ' | ' |
Number of Shares, Outstanding | 31,686 | ' | ' | ' |
Weighted Average Remaining Contractual Life | '2 years 1 month 6 days | ' | ' | ' |
Awards Outstanding, Weighted Average Exercise Price | $15.67 | ' | ' | ' |
Number of Shares, Vested | 31,686 | ' | ' | ' |
Awards Vested, Weighted Average Exercise Price | $15.67 | ' | ' | ' |
16.67 - 21.66 | ' | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' | ' | ' |
Range of Exercise Prices, Lower Limit | $16.67 | ' | ' | ' |
Range of Exercise Prices, Upper Limit | $21.66 | ' | ' | ' |
Number of Shares, Outstanding | 144,285 | ' | ' | ' |
Weighted Average Remaining Contractual Life | '4 years 4 months 24 days | ' | ' | ' |
Awards Outstanding, Weighted Average Exercise Price | $19.87 | ' | ' | ' |
Number of Shares, Vested | 144,285 | ' | ' | ' |
Awards Vested, Weighted Average Exercise Price | $19.87 | ' | ' | ' |
21.67 - 26.66 | ' | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' | ' | ' |
Range of Exercise Prices, Lower Limit | $21.67 | ' | ' | ' |
Range of Exercise Prices, Upper Limit | $26.66 | ' | ' | ' |
Number of Shares, Outstanding | 728,053 | ' | ' | ' |
Weighted Average Remaining Contractual Life | '5 years 8 months 12 days | ' | ' | ' |
Awards Outstanding, Weighted Average Exercise Price | $24.83 | ' | ' | ' |
Number of Shares, Vested | 525,271 | ' | ' | ' |
Awards Vested, Weighted Average Exercise Price | $24.51 | ' | ' | ' |
26.67 - 31.66 | ' | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' | ' | ' |
Range of Exercise Prices, Lower Limit | $26.67 | ' | ' | ' |
Range of Exercise Prices, Upper Limit | $31.66 | ' | ' | ' |
Number of Shares, Outstanding | 419,148 | ' | ' | ' |
Weighted Average Remaining Contractual Life | '5 years 4 months 24 days | ' | ' | ' |
Awards Outstanding, Weighted Average Exercise Price | $27.09 | ' | ' | ' |
Number of Shares, Vested | 318,960 | ' | ' | ' |
Awards Vested, Weighted Average Exercise Price | $27.09 | ' | ' | ' |
31.67 - 36.66 | ' | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' | ' | ' |
Range of Exercise Prices, Lower Limit | $31.67 | ' | ' | ' |
Range of Exercise Prices, Upper Limit | $36.66 | ' | ' | ' |
Number of Shares, Outstanding | 280,146 | ' | ' | ' |
Weighted Average Remaining Contractual Life | '7 years 2 months 12 days | ' | ' | ' |
Awards Outstanding, Weighted Average Exercise Price | $35.73 | ' | ' | ' |
Number of Shares, Vested | 143,325 | ' | ' | ' |
Awards Vested, Weighted Average Exercise Price | $35.46 | ' | ' | ' |
36.67 - 38.00 | ' | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' | ' | ' |
Range of Exercise Prices, Lower Limit | $36.67 | ' | ' | ' |
Range of Exercise Prices, Upper Limit | $38 | ' | ' | ' |
Number of Shares, Outstanding | 423,264 | ' | ' | ' |
Weighted Average Remaining Contractual Life | '7 years 2 months 12 days | ' | ' | ' |
Awards Outstanding, Weighted Average Exercise Price | $37.45 | ' | ' | ' |
Number of Shares, Vested | 183,882 | ' | ' | ' |
Awards Vested, Weighted Average Exercise Price | $37.45 | ' | ' | ' |
Fair_Value_of_Granted_Options_
Fair Value of Granted Options and Stock Appreciation Rights Estimated Using Black- Scholes Pricing Model (Detail) (Stock Option and Stock Appreciation Rights, USD $) | 12 Months Ended |
Dec. 31, 2011 | |
Stock Option and Stock Appreciation Rights | ' |
Schedule of Weighted Average Fair Values of Stock Options [Line Items] | ' |
Weighted average expected dividend yield | 5.80% |
Weighted average expected implied volatility | 30.00% |
Weighted average risk-free interest rate | 1.50% |
Expected holding period (in years) | '5 years |
Weighted average fair value of awards | $4.90 |
Restricted_Stock_Unit_Activity
Restricted Stock Unit Activity (Detail) (Restricted Stock Unit (RSUs), USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Restricted Stock Unit (RSUs) | ' | ' |
Number of Restricted Stock Units | ' | ' |
Balance at beginning of period | 207,339 | ' |
Granted | 217,216 | 210,891 |
Transferred to restricted | -192,672 | ' |
Forfeited | -12,672 | -3,552 |
Balance at end of period | 219,211 | 207,339 |
Weighted Average Grant Date Fair Value | ' | ' |
Balance at beginning of period | $42.36 | ' |
Granted | $41.63 | $42.36 |
Transferred to restricted | $42.35 | ' |
Forfeited | $42.42 | $42.35 |
Balance at end of period | $41.64 | $42.36 |
Restricted_Stock_Activity_Deta
Restricted Stock Activity (Detail) (Restricted Stock Activity, USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Restricted Stock Activity | ' | ' | ' |
Number of Awards | ' | ' | ' |
Balance at beginning of period | 1,028,844 | 1,310,619 | 758,049 |
Granted | 166,125 | 156,450 | 599,526 |
Transferred from RSU | 179,280 | ' | ' |
Vested | -362,100 | -396,786 | -24,156 |
Forfeited | -18,837 | -41,439 | -22,800 |
Balance at end of period | 993,312 | 1,028,844 | 1,310,619 |
Weighted Average Grant Date Fair Value | ' | ' | ' |
Balance at beginning of period | $28.33 | $24.97 | $23.76 |
Granted | $41.28 | $40.97 | $26.50 |
Transferred from RSU | $42.35 | ' | ' |
Vested | $26.25 | $22.27 | $24.85 |
Forfeited | $31.49 | $28.01 | $24.95 |
Balance at end of period | $33.72 | $28.33 | $24.97 |
Share_Repurchase_Programs_Addi
Share Repurchase Programs - Additional Information (Detail) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 2 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Aug. 09, 2011 | 31-May-11 | Dec. 31, 2013 | 31-May-11 | Dec. 31, 2013 | Feb. 24, 2012 | Feb. 29, 2012 | Dec. 31, 2013 | Jan. 30, 2013 | Jan. 31, 2013 | Dec. 31, 2013 | 21-May-13 | Mar. 12, 2013 | Dec. 31, 2013 | |
Share repurchase program, August 2010 - August 2011 | Share repurchase program, August 2010 - August 2011 | Share repurchase program, August 2010 - August 2011 | Share Repurchase Program May 2011 | Share Repurchase Program May 2011 | Share repurchase program, August 2011 - February 2012 | Share repurchase program, August 2011 - February 2012 | Share repurchase program, August 2011 - February 2012 | Share repurchase program, August 2012 - January 2013 | Share repurchase program, August 2012 - January 2013 | Share repurchase program, August 2012 - January 2013 | Share repurchase program, August 2012 - January 2013 | Share repurchase program, August 2012 - January 2013 | Share repurchases under 2013 program | |||||
Maximum | ||||||||||||||||||
Equity, Class of Treasury Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Amount authorized for repurchase of outstanding common stock | $5,300 | ' | ' | $1,400 | $1,000 | $1,400 | [1] | ' | ' | $750 | ' | $750 | $500 | ' | $500 | ' | $500 | ' |
Authorized amount for additional repurchase of outstanding common stock | ' | ' | ' | ' | ' | ' | 400 | ' | ' | ' | ' | ' | ' | ' | 500 | ' | ' | |
Payments for repurchase of common stock | 795 | 578 | 1,586 | ' | ' | ' | 1,400 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Repurchase of common stock, shares | 160.8 | ' | ' | ' | ' | 45.1 | [1] | ' | 45.1 | ' | 4.9 | 20.1 | ' | 2.8 | 12.7 | ' | ' | 15.2 |
Average per share price of repurchase of common stock | ' | ' | ' | ' | ' | ' | ' | $31.02 | ' | $38.28 | $37.29 | ' | $39.24 | $39.38 | ' | ' | $45.14 | |
Repurchase of common stock | $795 | $578 | $1,586 | ' | ' | ' | ' | ' | ' | $188 | ' | ' | $109 | ' | ' | ' | $686 | |
[1] | As amended on May 19, 2011 |
Share_Repurchase_Program_Detai
Share Repurchase Program (Detail) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 2 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Aug. 09, 2011 | 31-May-11 | Dec. 31, 2013 | Feb. 24, 2012 | Feb. 29, 2012 | Dec. 31, 2013 | Jan. 30, 2013 | Jan. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | ||
Share repurchase program, July 2008 - October 2008 | Share repurchase programs, May 2009 - July 2009 | Share repurchase program, July 2009 - January 2010 | Share repurchase program, February 2010 - May 2010 | Share repurchase program, August 2010 - August 2011 | Share repurchase program, August 2010 - August 2011 | Share repurchase program, August 2010 - August 2011 | Share repurchase program, August 2011 - February 2012 | Share repurchase program, August 2011 - February 2012 | Share repurchase program, August 2011 - February 2012 | Share repurchase program, August 2012 - January 2013 | Share repurchase program, August 2012 - January 2013 | Share repurchase program, August 2012 - January 2013 | Share Repurchase Program March, 2013 | ||||
Equity, Class of Treasury Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Amount authorized | $5,300 | $400 | $250 | $750 | $250 | $1,400 | $1,000 | $1,400 | [1] | $750 | ' | $750 | $500 | ' | $500 | $1,000 | [2] |
Number of shares repurchased | 160.8 | 17.6 | 11 | 29.3 | 9.8 | ' | ' | 45.1 | [1] | ' | 4.9 | 20.1 | ' | 2.8 | 12.7 | 15.2 | [2] |
Share repurchase program periods | ' | 'July 2008 - October 2008 | 'May 2009 - July 2009 | 'July 2009 - January 2010 | 'February 2010 - May 2010 | ' | ' | 'August 2010 - August 2011 | [1] | ' | ' | 'August 2011 - February 2012 | ' | ' | 'August 2012 - January 2013 | 'March 2013 | [2] |
[1] | As amended on May 19, 2011 | ||||||||||||||||
[2] | As amended on May 21, 2013 |
Changes_in_Accumulated_Other_C
Changes in Accumulated Other Comprehensive Loss (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' |
Beginning balance, January 1, 2013 | ($241) | ' | ' |
Pension and post-retirement plan actuarial gains and prior service cost | 110 | -13 | -119 |
Foreign currency translation adjustments | ' | ' | ' |
Ending balance December 31, 2013 | -130 | -241 | ' |
Accumulated Defined Benefit Plans Adjustment | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' |
Beginning balance, January 1, 2013 | 241 | ' | ' |
Pension and post-retirement plan actuarial gains and prior service cost | -110 | ' | ' |
Foreign currency translation adjustments | -1 | ' | ' |
Ending balance December 31, 2013 | 130 | ' | ' |
Accumulated Defined Benefit Plans Adjustment | Defined Benefit Pension Plans | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' |
Beginning balance, January 1, 2013 | 241 | ' | ' |
Pension and post-retirement plan actuarial gains and prior service cost | -110 | ' | ' |
Ending balance December 31, 2013 | 131 | ' | ' |
Accumulated Defined Benefit Plans Adjustment | Foreign Currency | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' |
Foreign currency translation adjustments | -1 | ' | ' |
Ending balance December 31, 2013 | ($1) | ' | ' |
Reclassifications_Out_of_Accum
Reclassifications Out of Accumulated Other Comprehensive Loss (Detail) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Amortization of defined benefit pension and post-retirement items: | ' | ' | ' | |
Income taxes | ($704) | ($629) | ($654) | |
Accumulated Defined Benefit Plans Adjustment | Reclassification out of Accumulated Other Comprehensive Income | ' | ' | ' | |
Amortization of defined benefit pension and post-retirement items: | ' | ' | ' | |
Prior service costs | -4 | [1] | ' | ' |
Actuarial loss | -20 | [1] | ' | ' |
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest, Total | -24 | ' | ' | |
Income taxes | 8 | ' | ' | |
Total reclassifications for the period | ($16) | ' | ' | |
[1] | These accumulated comprehensive loss components are included in the computation of net periodic pension cost (see Note 16, "Retirement Plans," for additional details), which is included in cost of sales and selling, general and administrative expenses. |
Quarterly_Financial_Data_Detai
Quarterly Financial Data (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Quarterly Financial Data [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | $1,743 | $1,827 | $1,804 | $1,577 | $1,704 | $1,661 | $1,731 | $1,526 | $6,950 | $6,623 | $6,466 |
Gross profit | 659 | 669 | 678 | 713 | 644 | 602 | 612 | 523 | 2,719 | 2,382 | 2,343 |
Net income | $281 | $258 | $313 | $328 | $309 | $283 | $284 | $223 | $1,180 | $1,099 | $1,116 |
Net income per share, diluted | $0.76 | $0.69 | $0.83 | $0.86 | $0.80 | $0.72 | $0.72 | $0.57 | $3.15 | $2.81 | $2.66 |
Basic weighted average number of shares outstanding | 366.53 | 371.01 | 375.86 | 378.62 | 384.87 | 390.21 | 390.53 | 391.45 | 372.96 | 389.27 | 417.32 |
Diluted weighted average number of shares outstanding | 367.19 | 371.77 | 376.61 | 379.42 | 385.59 | 391.05 | 391.44 | 392.4 | 373.71 | 390.13 | 418.06 |
Segment_Information_Additional
Segment Information - Additional Information (Detail) | 1 Months Ended | 12 Months Ended |
Apr. 30, 2012 | Dec. 31, 2013 | |
Segment | Segment | |
Segment Reporting Information [Line Items] | ' | ' |
Number of reportable segments | 1 | 2 |
Segment_Information_Detail
Segment Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Revenue from External Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Net sales | $1,743 | $1,827 | $1,804 | $1,577 | $1,704 | $1,661 | $1,731 | $1,526 | $6,950 | $6,623 | $6,466 | |||
Cost of sales | ' | ' | ' | ' | ' | ' | ' | ' | 4,231 | 4,241 | 4,123 | |||
Gross profit | 659 | 669 | 678 | 713 | 644 | 602 | 612 | 523 | 2,719 | 2,382 | 2,343 | |||
Selling, general and administrative | ' | ' | ' | ' | ' | ' | ' | ' | 665 | [1] | 504 | [1] | 451 | [1] |
Operating income | ' | ' | ' | ' | ' | ' | ' | ' | 2,054 | 1,878 | 1,892 | |||
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 50 | 39 | 37 | |||
Total assets | 3,536 | ' | ' | ' | 3,396 | ' | ' | ' | 3,536 | 3,396 | ' | |||
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | 62 | 74 | ' | |||
Cigarettes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue from External Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 6,720 | 6,562 | ' | |||
Cost of sales | ' | ' | ' | ' | ' | ' | ' | ' | 4,071 | 4,201 | ' | |||
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | 2,649 | 2,361 | ' | |||
Selling, general and administrative | ' | ' | ' | ' | ' | ' | ' | ' | 595 | 484 | ' | |||
Operating income | ' | ' | ' | ' | ' | ' | ' | ' | 2,054 | 1,877 | ' | |||
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 44 | 38 | ' | |||
Total assets | 3,316 | ' | ' | ' | 3,313 | ' | ' | ' | 3,316 | 3,313 | ' | |||
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | 61 | 74 | ' | |||
Electronic Cigarettes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue from External Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 230 | 61 | ' | |||
Cost of sales | ' | ' | ' | ' | ' | ' | ' | ' | 160 | 40 | ' | |||
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | 70 | 21 | ' | |||
Selling, general and administrative | ' | ' | ' | ' | ' | ' | ' | ' | 70 | 20 | ' | |||
Operating income | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | |||
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 6 | 1 | ' | |||
Total assets | 345 | ' | ' | ' | 208 | ' | ' | ' | 345 | 208 | ' | |||
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | |||
Consolidating Adjustments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue from External Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Total assets | ($125) | ' | ' | ' | ($125) | ' | ' | ' | ($125) | ($125) | ' | |||
[1] | Includes intercompany royalties between Issuer and non-guarantor subsidiaries of a corresponding amount. |
Condensed_Consolidating_Balanc
Condensed Consolidating Balance Sheets (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | ||
In Millions, unless otherwise specified | ||||||
ASSETS: | ' | ' | ' | ' | ||
Cash and cash equivalents | $1,454 | $1,720 | $1,634 | $2,063 | ||
Short term investments-available for sale securities | 157 | ' | ' | ' | ||
Accounts receivable, less allowances of $3 | 19 | 18 | ' | ' | ||
Other receivables | 29 | [1] | 52 | [1] | ' | ' |
Inventories | 499 | 410 | ' | ' | ||
Deferred income taxes | 555 | 557 | ' | ' | ||
Other current assets | 23 | 20 | ' | ' | ||
Total current assets | 2,736 | 2,777 | ' | ' | ||
Plant and equipment, net | 316 | 298 | ' | ' | ||
Long term investments-available for sale securities | 93 | ' | ' | ' | ||
Goodwill | 102 | 64 | ' | ' | ||
Intangible assets | 87 | 57 | ' | ' | ||
Deferred income taxes | 51 | 48 | ' | ' | ||
Other assets | 151 | 152 | ' | ' | ||
Total assets | 3,536 | 3,396 | ' | ' | ||
Liabilities and Shareholders' Equity (Deficit): | ' | ' | ' | ' | ||
Accounts and drafts payable | 42 | 39 | ' | ' | ||
Accrued liabilities | 377 | [1] | 356 | [1] | ' | ' |
Settlement costs | 1,224 | 1,183 | ' | ' | ||
Income taxes | 8 | 23 | ' | ' | ||
Total current liabilities | 1,651 | 1,601 | ' | ' | ||
Long-term debt | 3,560 | 3,111 | ' | ' | ||
Postretirement pension, medical and life insurance benefits | 305 | 409 | ' | ' | ||
Other liabilities | 84 | 52 | ' | ' | ||
Total liabilities | 5,600 | 5,173 | ' | ' | ||
Shareholders' Equity (Deficit): | ' | ' | ' | ' | ||
Common stock | 4 | 5 | ' | ' | ||
Additional paid-in capital | 256 | 298 | ' | ' | ||
Retained earnings/accumulated (deficit) | -1,438 | 2,351 | ' | ' | ||
Accumulated other comprehensive income (loss) | -130 | -241 | ' | ' | ||
Treasury stock | -756 | -4,190 | ' | ' | ||
Total shareholders' deficit | -2,064 | -1,777 | -1,513 | -225 | ||
Total liabilities and shareholders' equity (deficit) | 3,536 | 3,396 | ' | ' | ||
Parent | ' | ' | ' | ' | ||
ASSETS: | ' | ' | ' | ' | ||
Cash and cash equivalents | 341 | 150 | 235 | 163 | ||
Other receivables | ' | 1 | [1] | ' | ' | |
Total current assets | 341 | 151 | ' | ' | ||
Other assets | 125 | 125 | ' | ' | ||
Total assets | 466 | 276 | ' | ' | ||
Liabilities and Shareholders' Equity (Deficit): | ' | ' | ' | ' | ||
Accrued liabilities | 13 | [1] | 14 | [1] | ' | ' |
Income taxes | 1 | ' | ' | ' | ||
Total current liabilities | 14 | 14 | ' | ' | ||
Investment in subsidiaries | 2,516 | 2,037 | ' | ' | ||
Other liabilities | ' | 2 | ' | ' | ||
Total liabilities | 2,530 | 2,053 | ' | ' | ||
Shareholders' Equity (Deficit): | ' | ' | ' | ' | ||
Common stock | 4 | 5 | ' | ' | ||
Additional paid-in capital | 256 | 298 | ' | ' | ||
Retained earnings/accumulated (deficit) | -1,438 | 2,351 | ' | ' | ||
Accumulated other comprehensive income (loss) | -130 | -241 | ' | ' | ||
Treasury stock | -756 | -4,190 | ' | ' | ||
Total shareholders' deficit | -2,064 | -1,777 | ' | ' | ||
Total liabilities and shareholders' equity (deficit) | 466 | 276 | ' | ' | ||
Issuer | ' | ' | ' | ' | ||
ASSETS: | ' | ' | ' | ' | ||
Cash and cash equivalents | 1,002 | 1,471 | 582 | 1,181 | ||
Short term investments-available for sale securities | 157 | ' | ' | ' | ||
Accounts receivable, less allowances of $3 | 8 | 8 | ' | ' | ||
Other receivables | 24 | [1] | 41 | [1] | ' | ' |
Inventories | 412 | 369 | ' | ' | ||
Deferred income taxes | 549 | 555 | ' | ' | ||
Other current assets | 19 | 12 | ' | ' | ||
Total current assets | 2,171 | 2,456 | ' | ' | ||
Investment in subsidiaries | 148 | 118 | ' | ' | ||
Plant and equipment, net | 315 | 298 | ' | ' | ||
Long term investments-available for sale securities | 93 | ' | ' | ' | ||
Deferred income taxes | 48 | 45 | ' | ' | ||
Other assets | 151 | 152 | ' | ' | ||
Total assets | 2,926 | 3,069 | ' | ' | ||
Liabilities and Shareholders' Equity (Deficit): | ' | ' | ' | ' | ||
Accounts and drafts payable | 37 | 35 | ' | ' | ||
Accrued liabilities | 434 | [1] | 399 | [1] | ' | ' |
Settlement costs | 1,224 | 1,183 | ' | ' | ||
Income taxes | 11 | ' | ' | ' | ||
Total current liabilities | 1,706 | 1,617 | ' | ' | ||
Long-term debt | 3,560 | 3,111 | ' | ' | ||
Postretirement pension, medical and life insurance benefits | 305 | 409 | ' | ' | ||
Other liabilities | 44 | 39 | ' | ' | ||
Total liabilities | 5,615 | 5,176 | ' | ' | ||
Shareholders' Equity (Deficit): | ' | ' | ' | ' | ||
Additional paid-in capital | 130 | 92 | ' | ' | ||
Retained earnings/accumulated (deficit) | -2,688 | -1,958 | ' | ' | ||
Accumulated other comprehensive income (loss) | -131 | -241 | ' | ' | ||
Total shareholders' deficit | -2,689 | -2,107 | ' | ' | ||
Total liabilities and shareholders' equity (deficit) | 2,926 | 3,069 | ' | ' | ||
Non-guarantor Subsidiaries | ' | ' | ' | ' | ||
ASSETS: | ' | ' | ' | ' | ||
Cash and cash equivalents | 111 | 99 | 817 | 719 | ||
Accounts receivable, less allowances of $3 | 11 | 10 | ' | ' | ||
Other receivables | 93 | [1] | 77 | [1] | ' | ' |
Inventories | 87 | 41 | ' | ' | ||
Deferred income taxes | 6 | 2 | ' | ' | ||
Other current assets | 4 | 8 | ' | ' | ||
Total current assets | 312 | 237 | ' | ' | ||
Plant and equipment, net | 1 | ' | ' | ' | ||
Goodwill | 102 | 64 | ' | ' | ||
Intangible assets | 87 | 57 | ' | ' | ||
Deferred income taxes | 3 | 5 | ' | ' | ||
Total assets | 505 | 363 | ' | ' | ||
Liabilities and Shareholders' Equity (Deficit): | ' | ' | ' | ' | ||
Accounts and drafts payable | 5 | 4 | ' | ' | ||
Accrued liabilities | 14 | [1] | 10 | [1] | ' | ' |
Income taxes | ' | 23 | ' | ' | ||
Total current liabilities | 19 | 37 | ' | ' | ||
Other liabilities | 165 | 138 | ' | ' | ||
Total liabilities | 184 | 175 | ' | ' | ||
Shareholders' Equity (Deficit): | ' | ' | ' | ' | ||
Additional paid-in capital | 177 | 72 | ' | ' | ||
Retained earnings/accumulated (deficit) | 143 | 116 | ' | ' | ||
Accumulated other comprehensive income (loss) | 1 | ' | ' | ' | ||
Total shareholders' deficit | 321 | 188 | ' | ' | ||
Total liabilities and shareholders' equity (deficit) | 505 | 363 | ' | ' | ||
Total Consolidating Adjustments | ' | ' | ' | ' | ||
ASSETS: | ' | ' | ' | ' | ||
Other receivables | -88 | [1] | -67 | [1] | ' | ' |
Total current assets | -88 | -67 | ' | ' | ||
Investment in subsidiaries | -148 | -118 | ' | ' | ||
Deferred income taxes | ' | -2 | ' | ' | ||
Other assets | -125 | -125 | ' | ' | ||
Total assets | -361 | -312 | ' | ' | ||
Liabilities and Shareholders' Equity (Deficit): | ' | ' | ' | ' | ||
Accrued liabilities | -84 | [1] | -67 | [1] | ' | ' |
Income taxes | -4 | ' | ' | ' | ||
Total current liabilities | -88 | -67 | ' | ' | ||
Investment in subsidiaries | -2,516 | -2,037 | ' | ' | ||
Other liabilities | -125 | -127 | ' | ' | ||
Total liabilities | -2,729 | -2,231 | ' | ' | ||
Shareholders' Equity (Deficit): | ' | ' | ' | ' | ||
Additional paid-in capital | -307 | -164 | ' | ' | ||
Retained earnings/accumulated (deficit) | 2,545 | 1,842 | ' | ' | ||
Accumulated other comprehensive income (loss) | 130 | 241 | ' | ' | ||
Total shareholders' deficit | 2,368 | 1,919 | ' | ' | ||
Total liabilities and shareholders' equity (deficit) | ($361) | ($312) | ' | ' | ||
[1] | Includes intercompany royalties between Issuer and non-guarantor subsidiaries of a corresponding amount. |
Condensed_Consolidating_Balanc1
Condensed Consolidating Balance Sheets (Parenthetical) (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Condensed Financial Statements, Captions [Line Items] | ' | ' |
Accounts receivable, allowances | $3 | $3 |
Condensed_Consolidating_Statem
Condensed Consolidating Statements of Income (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Condensed Financial Statements, Captions [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Net sales | $1,743 | $1,827 | $1,804 | $1,577 | $1,704 | $1,661 | $1,731 | $1,526 | $6,950 | $6,623 | $6,466 | |||
Cost of sales | ' | ' | ' | ' | ' | ' | ' | ' | 4,231 | 4,241 | 4,123 | |||
Gross profit | 659 | 669 | 678 | 713 | 644 | 602 | 612 | 523 | 2,719 | 2,382 | 2,343 | |||
Selling, general and administrative | ' | ' | ' | ' | ' | ' | ' | ' | 665 | [1] | 504 | [1] | 451 | [1] |
Operating income | ' | ' | ' | ' | ' | ' | ' | ' | 2,054 | 1,878 | 1,892 | |||
Investment income | ' | ' | ' | ' | ' | ' | ' | ' | 2 | 4 | 3 | |||
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | -172 | -154 | -125 | |||
Income before taxes | ' | ' | ' | ' | ' | ' | ' | ' | 1,884 | 1,728 | 1,770 | |||
Income taxes | ' | ' | ' | ' | ' | ' | ' | ' | 704 | 629 | 654 | |||
Net income | 281 | 258 | 313 | 328 | 309 | 283 | 284 | 223 | 1,180 | 1,099 | 1,116 | |||
Parent | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Condensed Financial Statements, Captions [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Selling, general and administrative | ' | ' | ' | ' | ' | ' | ' | ' | 2 | [1] | 1 | [1] | ' | |
Operating income | ' | ' | ' | ' | ' | ' | ' | ' | -2 | -1 | ' | |||
Investment income | ' | ' | ' | ' | ' | ' | ' | ' | 6 | ' | 1 | |||
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | -1 | ' | |||
Income before taxes | ' | ' | ' | ' | ' | ' | ' | ' | 4 | -2 | 1 | |||
Income taxes | ' | ' | ' | ' | ' | ' | ' | ' | 4 | -1 | ' | |||
Equity in earnings of subsidiaries | ' | ' | ' | ' | ' | ' | ' | ' | 1,180 | 1,100 | 1,115 | |||
Net income | ' | ' | ' | ' | ' | ' | ' | ' | 1,180 | 1,099 | 1,116 | |||
Issuer | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Condensed Financial Statements, Captions [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 6,720 | 6,562 | 6,466 | |||
Cost of sales | ' | ' | ' | ' | ' | ' | ' | ' | 4,071 | 4,201 | 4,123 | |||
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | 2,649 | 2,361 | 2,343 | |||
Selling, general and administrative | ' | ' | ' | ' | ' | ' | ' | ' | 1,692 | [1] | 1,536 | [1] | 1,473 | [1] |
Operating income | ' | ' | ' | ' | ' | ' | ' | ' | 957 | 825 | 870 | |||
Investment income | ' | ' | ' | ' | ' | ' | ' | ' | 2 | 3 | 1 | |||
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | -172 | -151 | -125 | |||
Income before taxes | ' | ' | ' | ' | ' | ' | ' | ' | 787 | 677 | 746 | |||
Income taxes | ' | ' | ' | ' | ' | ' | ' | ' | 295 | 238 | 290 | |||
Equity in earnings of subsidiaries | ' | ' | ' | ' | ' | ' | ' | ' | 690 | 661 | 659 | |||
Net income | ' | ' | ' | ' | ' | ' | ' | ' | 1,182 | 1,100 | 1,115 | |||
Non-guarantor Subsidiaries | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Condensed Financial Statements, Captions [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 1,333 | 1,118 | ' | |||
Cost of sales | ' | ' | ' | ' | ' | ' | ' | ' | 160 | 40 | ' | |||
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | 1,173 | 1,078 | ' | |||
Selling, general and administrative | ' | ' | ' | ' | ' | ' | ' | ' | 74 | [1] | 24 | [1] | -1,022 | [1] |
Operating income | ' | ' | ' | ' | ' | ' | ' | ' | 1,099 | 1,054 | 1,022 | |||
Investment income | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | 1 | |||
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | -6 | -2 | ' | |||
Income before taxes | ' | ' | ' | ' | ' | ' | ' | ' | 1,093 | 1,053 | 1,023 | |||
Income taxes | ' | ' | ' | ' | ' | ' | ' | ' | 405 | 392 | 364 | |||
Net income | ' | ' | ' | ' | ' | ' | ' | ' | 688 | 661 | 659 | |||
Total Consolidating Adjustments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Condensed Financial Statements, Captions [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | -1,103 | -1,057 | ' | |||
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | -1,103 | -1,057 | ' | |||
Selling, general and administrative | ' | ' | ' | ' | ' | ' | ' | ' | -1,103 | [1] | -1,057 | [1] | ' | |
Investment income | ' | ' | ' | ' | ' | ' | ' | ' | -6 | ' | ' | |||
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | 6 | ' | ' | |||
Equity in earnings of subsidiaries | ' | ' | ' | ' | ' | ' | ' | ' | -1,870 | -1,761 | -1,774 | |||
Net income | ' | ' | ' | ' | ' | ' | ' | ' | ($1,870) | ($1,761) | ($1,774) | |||
[1] | Includes intercompany royalties between Issuer and non-guarantor subsidiaries of a corresponding amount. |
Condensed_Consolidating_Statem1
Condensed Consolidating Statements of Income (Parenthetical) (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Condensed Financial Statements, Captions [Line Items] | ' | ' | ' |
Excise taxes | $1,978 | $1,987 | $2,014 |
Condensed_Consolidating_Statem2
Condensed Consolidating Statements of Comprehensive Income (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Condensed Financial Statements, Captions [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | $281 | $258 | $313 | $328 | $309 | $283 | $284 | $223 | $1,180 | $1,099 | $1,116 |
Other comprehensive income (loss), net of tax: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Defined benefit retirement plans gain (loss), net of tax expense (benefit) of $41, $(4), and $(64) | ' | ' | ' | ' | ' | ' | ' | ' | 110 | -13 | -119 |
Foreign currency translation adjustments, net of tax benefit of - | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' |
Other comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 111 | -13 | -119 |
Comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | 1,291 | 1,086 | 997 |
Parent | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Condensed Financial Statements, Captions [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | ' | ' | ' | ' | ' | ' | ' | ' | 1,180 | 1,099 | 1,116 |
Other comprehensive income (loss), net of tax: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Defined benefit retirement plans gain (loss), net of tax expense (benefit) of $41, $(4), and $(64) | ' | ' | ' | ' | ' | ' | ' | ' | 110 | ' | ' |
Foreign currency translation adjustments, net of tax benefit of - | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' |
Other comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 111 | ' | ' |
Comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | 1,291 | 1,099 | 1,116 |
Issuer | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Condensed Financial Statements, Captions [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | ' | ' | ' | ' | ' | ' | ' | ' | 1,182 | 1,100 | 1,115 |
Other comprehensive income (loss), net of tax: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Defined benefit retirement plans gain (loss), net of tax expense (benefit) of $41, $(4), and $(64) | ' | ' | ' | ' | ' | ' | ' | ' | 110 | -13 | -119 |
Other comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 110 | -13 | -119 |
Comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | 1,292 | 1,087 | 996 |
Non-guarantor Subsidiaries | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Condensed Financial Statements, Captions [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | ' | ' | ' | ' | ' | ' | ' | ' | 688 | 661 | 659 |
Other comprehensive income (loss), net of tax: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Foreign currency translation adjustments, net of tax benefit of - | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' |
Other comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' |
Comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | 689 | 661 | 659 |
Total Consolidating Adjustments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Condensed Financial Statements, Captions [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | ' | ' | ' | ' | ' | ' | ' | ' | -1,870 | -1,761 | -1,774 |
Other comprehensive income (loss), net of tax: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Defined benefit retirement plans gain (loss), net of tax expense (benefit) of $41, $(4), and $(64) | ' | ' | ' | ' | ' | ' | ' | ' | -110 | ' | ' |
Foreign currency translation adjustments, net of tax benefit of - | ' | ' | ' | ' | ' | ' | ' | ' | -1 | ' | ' |
Other comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | -111 | ' | ' |
Comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | ($1,981) | ($1,761) | ($1,774) |
Condensed_Consolidating_Statem3
Condensed Consolidating Statements of Comprehensive Income (Parenthetical) (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Condensed Financial Statements, Captions [Line Items] | ' | ' | ' |
Defined benefit retirement plan gain (loss), tax expense (benefit) | $41 | ($4) | ($64) |
Foreign currency translation adjustments, tax benefit | ' | ' | ' |
Parent | ' | ' | ' |
Condensed Financial Statements, Captions [Line Items] | ' | ' | ' |
Foreign currency translation adjustments, tax benefit | ' | ' | ' |
Issuer | ' | ' | ' |
Condensed Financial Statements, Captions [Line Items] | ' | ' | ' |
Foreign currency translation adjustments, tax benefit | ' | ' | ' |
Non-guarantor Subsidiaries | ' | ' | ' |
Condensed Financial Statements, Captions [Line Items] | ' | ' | ' |
Foreign currency translation adjustments, tax benefit | ' | ' | ' |
Total Consolidating Adjustments | ' | ' | ' |
Condensed Financial Statements, Captions [Line Items] | ' | ' | ' |
Foreign currency translation adjustments, tax benefit | ' | ' | ' |
Condensed_Consolidating_Statem4
Condensed Consolidating Statements of Cash Flows (Detail) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Cash flows from operating activities: | ' | ' | ' | |
Net income | $1,180 | $1,099 | $1,116 | |
Adjustments to reconcile to net cash provided by operating activities: | ' | ' | ' | |
Depreciation and amortization | 50 | 39 | 37 | |
Pension, health and life insurance contributions | -44 | -43 | -42 | |
Pension, health and life insurance benefits expense | 36 | 44 | 28 | |
Deferred income taxes | -42 | -11 | -15 | |
Share-based compensation | 18 | 20 | 16 | |
Excess tax benefits from share-based arrangements | -13 | -11 | -4 | |
Changes in operating assets and liabilities: | ' | ' | ' | |
Accounts and other receivables | -7 | -8 | 1 | |
Inventories | -89 | -118 | ' | |
Accounts payable and accrued liabilities | 20 | 64 | -33 | |
Settlement costs | 41 | 32 | 91 | |
Income taxes | 36 | 59 | -6 | |
Other current assets | 3 | 5 | -10 | |
Other assets | 3 | -1 | 4 | |
Net cash provided by (used in) operating activities | 1,192 | 1,170 | 1,183 | |
Cash flows from investing activities: | ' | ' | ' | |
Purchases of investments | -276 | ' | ' | |
Business acquisition | -46 | -135 | [1] | ' |
Additions to plant and equipment | -62 | -74 | -56 | |
Sales, maturities and calls of investments | 26 | 0 | ' | |
Net cash provided by (used in) investing activities | -358 | -209 | -56 | |
Cash flows from financing activities: | ' | ' | ' | |
Proceeds from issuance of long-term debt | 500 | 500 | 750 | |
Dividends paid | -823 | -807 | -723 | |
Shares repurchased | -795 | -578 | -1,586 | |
Debt issuance costs | -4 | -5 | -9 | |
Proceeds from exercise of stock options | 9 | 5 | 8 | |
Excess tax benefits from share-based arrangements | 13 | 10 | 4 | |
Net cash provided by (used in) financing activities | -1,100 | -875 | -1,556 | |
Effect of foreign currency rate changes on cash and cash equivalents | ' | ' | ' | |
Change in cash and cash equivalents | -266 | 86 | -429 | |
Cash and cash equivalents, beginning of year | 1,720 | 1,634 | 2,063 | |
Cash and cash equivalents, end of year | 1,454 | 1,720 | 1,634 | |
Parent | ' | ' | ' | |
Cash flows from operating activities: | ' | ' | ' | |
Net income | 1,180 | 1,099 | 1,116 | |
Adjustments to reconcile to net cash provided by operating activities: | ' | ' | ' | |
Equity income from subsidiaries | -1,180 | -1,100 | -1,115 | |
Deferred income taxes | -1 | 1 | ' | |
Share-based compensation | 1 | 1 | ' | |
Changes in operating assets and liabilities: | ' | ' | ' | |
Accounts and other receivables | ' | ' | -1 | |
Accounts payable and accrued liabilities | -1 | ' | 12 | |
Income taxes | 2 | -1 | ' | |
Return on investment in subsidiaries | 1,913 | 1,495 | 1,730 | |
Net cash provided by (used in) operating activities | 1,914 | 1,495 | 1,742 | |
Cash flows from investing activities: | ' | ' | ' | |
Business acquisition | ' | -125 | [1] | ' |
Investment in subsidiary | -105 | -70 | ' | |
Net cash provided by (used in) investing activities | -105 | -195 | 252 | |
Return of capital | ' | ' | 252 | |
Cash flows from financing activities: | ' | ' | ' | |
Proceeds from issuance of long-term debt | ' | ' | 387 | |
Dividends paid | -823 | -807 | -723 | |
Shares repurchased | -795 | -578 | -1,586 | |
Net cash provided by (used in) financing activities | -1,618 | -1,385 | -1,922 | |
Effect of foreign currency rate changes on cash and cash equivalents | ' | ' | ' | |
Change in cash and cash equivalents | 191 | -85 | 72 | |
Cash and cash equivalents, beginning of year | 150 | 235 | 163 | |
Cash and cash equivalents, end of year | 341 | 150 | 235 | |
Issuer | ' | ' | ' | |
Cash flows from operating activities: | ' | ' | ' | |
Net income | 1,182 | 1,100 | 1,115 | |
Adjustments to reconcile to net cash provided by operating activities: | ' | ' | ' | |
Equity income from subsidiaries | -690 | -661 | -659 | |
Depreciation and amortization | 44 | 38 | 37 | |
Pension, health and life insurance contributions | -44 | -43 | -42 | |
Pension, health and life insurance benefits expense | 36 | 44 | 28 | |
Deferred income taxes | -39 | -10 | -16 | |
Share-based compensation | 17 | 19 | 16 | |
Excess tax benefits from share-based arrangements | -13 | -11 | -4 | |
Changes in operating assets and liabilities: | ' | ' | ' | |
Accounts and other receivables | -8 | 877 | -873 | |
Inventories | -43 | -92 | ' | |
Accounts payable and accrued liabilities | 37 | 50 | -37 | |
Settlement costs | 41 | 32 | 91 | |
Income taxes | 54 | 43 | -2 | |
Other current assets | -1 | 13 | -10 | |
Other assets | 3 | -1 | -170 | |
Return on investment in subsidiaries | 661 | 550 | 1,212 | |
Net cash provided by (used in) operating activities | 1,237 | 1,948 | 686 | |
Cash flows from investing activities: | ' | ' | ' | |
Purchases of investments | -276 | ' | ' | |
Additions to plant and equipment | -61 | -74 | -56 | |
Sales, maturities and calls of investments | 26 | ' | ' | |
Net cash provided by (used in) investing activities | -311 | -74 | -56 | |
Cash flows from financing activities: | ' | ' | ' | |
Proceeds from issuance of long-term debt | 500 | 500 | 750 | |
Dividends paid | -1,913 | -1,495 | -1,982 | |
Debt issuance costs | -4 | -5 | -9 | |
Proceeds from exercise of stock options | 9 | 5 | 8 | |
Excess tax benefits from share-based arrangements | 13 | 10 | 4 | |
Net cash provided by (used in) financing activities | -1,395 | -985 | -1,229 | |
Effect of foreign currency rate changes on cash and cash equivalents | ' | ' | ' | |
Change in cash and cash equivalents | -469 | 889 | -599 | |
Cash and cash equivalents, beginning of year | 1,471 | 582 | 1,181 | |
Cash and cash equivalents, end of year | 1,002 | 1,471 | 582 | |
Non-guarantor Subsidiaries | ' | ' | ' | |
Cash flows from operating activities: | ' | ' | ' | |
Net income | 688 | 661 | 659 | |
Adjustments to reconcile to net cash provided by operating activities: | ' | ' | ' | |
Depreciation and amortization | 6 | 1 | ' | |
Deferred income taxes | -2 | -2 | 1 | |
Changes in operating assets and liabilities: | ' | ' | ' | |
Accounts and other receivables | -16 | -10 | -2 | |
Inventories | -46 | -26 | ' | |
Accounts payable and accrued liabilities | 1 | -861 | 869 | |
Income taxes | -20 | 17 | -4 | |
Other current assets | 4 | -8 | ' | |
Other assets | ' | ' | -213 | |
Net cash provided by (used in) operating activities | 615 | -228 | 1,310 | |
Cash flows from investing activities: | ' | ' | ' | |
Business acquisition | -46 | -135 | [1] | ' |
Additions to plant and equipment | -1 | ' | ' | |
Net cash provided by (used in) investing activities | -47 | -135 | ' | |
Cash flows from financing activities: | ' | ' | ' | |
Proceeds from issuance of long-term debt | ' | 125 | ' | |
Dividends paid | -661 | -550 | -1,212 | |
Contributions from parent | 105 | 70 | ' | |
Net cash provided by (used in) financing activities | -556 | -355 | -1,212 | |
Effect of foreign currency rate changes on cash and cash equivalents | ' | ' | ' | |
Change in cash and cash equivalents | 12 | -718 | 98 | |
Cash and cash equivalents, beginning of year | 99 | 817 | 719 | |
Cash and cash equivalents, end of year | 111 | 99 | 817 | |
Total Consolidating Adjustments | ' | ' | ' | |
Cash flows from operating activities: | ' | ' | ' | |
Net income | -1,870 | -1,761 | -1,774 | |
Adjustments to reconcile to net cash provided by operating activities: | ' | ' | ' | |
Equity income from subsidiaries | 1,870 | 1,761 | 1,774 | |
Changes in operating assets and liabilities: | ' | ' | ' | |
Accounts and other receivables | 17 | -875 | 877 | |
Accounts payable and accrued liabilities | -17 | 875 | -877 | |
Other assets | ' | ' | 387 | |
Return on investment in subsidiaries | -2,574 | -2,045 | -2,942 | |
Net cash provided by (used in) operating activities | -2,574 | -2,045 | -2,555 | |
Cash flows from investing activities: | ' | ' | ' | |
Business acquisition | ' | 125 | [1] | ' |
Investment in subsidiary | 105 | 70 | ' | |
Net cash provided by (used in) investing activities | 105 | 195 | -252 | |
Return of capital | ' | ' | -252 | |
Cash flows from financing activities: | ' | ' | ' | |
Proceeds from issuance of long-term debt | ' | -125 | -387 | |
Dividends paid | 2,574 | 2,045 | 3,194 | |
Contributions from parent | -105 | -70 | ' | |
Net cash provided by (used in) financing activities | 2,469 | 1,850 | 2,807 | |
Effect of foreign currency rate changes on cash and cash equivalents | ' | ' | ' | |
[1] | $125 million reflected as cash flows used by Parent consists of a loan from Parent to a Non-guarantor Subsidiary. |
Condensed_Consolidating_Statem5
Condensed Consolidating Statements of Cash Flows (Parenthetical) (Detail) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2012 |
Condensed Financial Statements, Captions [Line Items] | ' |
Cash flows used by Parent | $125 |
Legal_Proceedings_Additional_I
Legal Proceedings - Additional Information (Detail) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sep. 11, 2013 | Apr. 23, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 30, 2012 | Feb. 14, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 11, 2013 | Mar. 31, 2012 | Jul. 31, 2011 | Jun. 30, 2013 | Feb. 11, 2013 | Feb. 14, 2014 | Sep. 13, 2013 | Dec. 31, 2013 | Feb. 14, 2014 | Sep. 13, 2013 | Sep. 17, 2013 | Dec. 31, 2011 | Dec. 31, 2010 | Feb. 14, 2014 | Feb. 14, 2014 | Feb. 14, 2014 | Jun. 30, 2013 | Jan. 31, 2013 | Feb. 28, 2008 | Dec. 31, 2013 | Dec. 31, 2006 | Dec. 31, 2011 | Dec. 31, 2009 | Feb. 14, 2014 | Jan. 14, 2014 | Aug. 01, 2013 | Aug. 01, 2013 | Aug. 01, 2013 | Jan. 17, 2014 | Jan. 17, 2014 | Jan. 17, 2014 | 31-May-13 | Apr. 30, 2011 | Mar. 31, 2011 | Feb. 14, 2014 | Apr. 30, 2011 | 31-May-11 | Jul. 31, 2011 | Dec. 31, 2013 | Mar. 31, 2012 | Nov. 30, 2011 | 31-May-12 | Mar. 31, 2012 | Aug. 31, 2012 | 31-May-12 | 31-May-12 | 31-May-12 | 31-May-12 | 31-May-12 | 31-May-12 | Feb. 28, 2013 | 31-May-13 | Feb. 28, 2013 | 31-May-13 | 6-May-13 | 31-May-13 | 6-May-13 | 31-May-13 | 31-May-13 | Oct. 04, 2013 | 31-May-13 | Oct. 04, 2013 | 31-May-13 | 31-May-13 | Sep. 30, 2013 | Sep. 26, 2013 | Sep. 30, 2013 | Sep. 26, 2013 | Sep. 30, 2013 | Dec. 31, 2013 | Feb. 11, 2013 | Oct. 31, 2012 | Sep. 30, 2000 | Feb. 14, 2014 | Oct. 17, 2013 | Feb. 11, 2013 | Feb. 14, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Feb. 14, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Feb. 14, 2014 | |
State | State | Subsequent Event | Scenario, Forecast | Scenario, Forecast | Lorillard Tobacco | Weingart v. R.J. Reynolds Tobacco Company, et al. | Weingart v. R.J. Reynolds Tobacco Company, et al. | Weingart v. R.J. Reynolds Tobacco Company, et al. | Class Action Cases | Class Action Cases | Filter Cases | Filter Cases | Filter Cases | Filter Cases | Conventional Product Liability Cases | Conventional Product Liability Cases | Conventional Product Liability Cases | Conventional Product Liability Cases | Conventional Product Liability Cases | Conventional Product Liability Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | Engle Progeny Cases | West Virginia Individual Personal Injury Cases | West Virginia Individual Personal Injury Cases | West Virginia Individual Personal Injury Cases | West Virginia Individual Personal Injury Cases | West Virginia Individual Personal Injury Cases | Flight Attendant Cases | Flight Attendant Cases | Flight Attendant Cases | Reimbursement Cases | Reimbursement Cases | Reimbursement Cases | Indemnification Obligations | Tobacco-Related Antitrust Cases | Tobacco-Related Antitrust Cases | |||||||
LegalMatter | Minimum | Maximum | Lorillard Tobacco | LegalMatter | Subsequent Event | Subsequent Event | Lorillard Tobacco | LegalMatter | Subsequent Event | Case One | Case Two | LegalMatter | LegalMatter | LegalMatter | Employee | LegalMatter | Claim | Subsequent Event | Subsequent Event | 2-Jan-14 | 31-May-14 | 2-Sep-14 | 2-Jan-15 | 1-Apr-15 | 1-Jul-15 | Lorillard Tobacco | Sulcer v. Lorillard Tobacco Company, et al. | Mrozek v. Lorillard Tobacco Company | Mrozek v. Lorillard Tobacco Company | Tullo v. R.J. Reynolds, et al. | Jewett v. R.J. Reynolds, et al. | Weingart v. R.J. Reynolds Tobacco Company, et al. | Sury v. R.J. Reynolds Tobacco Company, et al. | Sury v. R.J. Reynolds Tobacco Company, et al. | Sury v. R.J. Reynolds Tobacco Company, et al. | Alexander v. Lorillard Tobacco Company, et al. | Alexander v. Lorillard Tobacco Company, et al. | Calloway v. R.J. Reynolds Tobacco Company, et al. | Calloway v. R.J. Reynolds Tobacco Company, et al. | Calloway v. R.J. Reynolds Tobacco Company, et al. | Calloway v. R.J. Reynolds Tobacco Company, et al. | Calloway v. R.J. Reynolds Tobacco Company, et al. | Calloway v. R.J. Reynolds Tobacco Company, et al. | Calloway v. R.J. Reynolds Tobacco Company, et al. | Evers | Evers v. R.J. Reynolds Tobacco Company, et al. | Evers v. R.J. Reynolds Tobacco Company, et al. | Cohen v. R.J. Reynolds Tobacco Company, et al. | Cohen v. R.J. Reynolds Tobacco Company, et al. | Cohen v. R.J. Reynolds Tobacco Company, et al. | Cohen v. R.J. Reynolds Tobacco Company, et al. | Cohen v. R.J. Reynolds Tobacco Company, et al. | Cohen v. R.J. Reynolds Tobacco Company, et al. | Ruffo | Ruffo | Ruffo | Ruffo | Ruffo | Gafney v. R.J. Reynolds Tobacco Company | Gafney v. R.J. Reynolds Tobacco Company | Gafney v. R.J. Reynolds Tobacco Company | Gafney v. R.J. Reynolds Tobacco Company | Gafney v. R.J. Reynolds Tobacco Company | Plaintiff | LegalMatter | LegalMatter | LegalMatter | Subsequent Event | LegalMatter | LegalMatter | Subsequent Event | Subsequent Event | LegalMatter | State | Subsequent Event | |||||||||||||||||||
LegalMatter | LegalMatter | LegalMatter | Subsequent Event | Subsequent Event | Case | LegalMatter | LegalMatter | Case | Case | Case | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Lorillard Tobacco | R J Reynolds | Philip Morris | Liggett | Other Defendants | Lorillard Tobacco | Lorillard Tobacco | R J Reynolds | Liggett | Lorillard Tobacco | Lorillard Tobacco | Philip Morris | Lorillard Tobacco | Lorillard Tobacco | R J Reynolds | LegalMatter | LegalMatter | LegalMatter | LegalMatter | LegalMatter | LegalMatter | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Case | Case | Case | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cases pending against cigarette manufacturers | ' | ' | ' | ' | ' | ' | ' | ' | 7,753 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 600 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lorillard Tobacco as defendant | ' | ' | ' | ' | ' | ' | ' | ' | 6,832 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 61 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 31 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lorillard Tobacco or Lorillard Inc as defendant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | 1 | ' | ' | 62 | ' | ' | ' | ' | 23 | ' | ' | ' | ' | ' | 3 | ' | ' | ' | 4,197 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 38 | ' | ' | 2,572 | ' | ' | 1 | ' | ' | 1 |
Lorillard Inc. as co-defendant | ' | ' | ' | ' | ' | ' | ' | ' | 655 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 651 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lights cases pending against other manufacturers, excluding Lorillard | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Medical monitoring Class Action cases | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of additional filter cases in which parent is defendant but which subsidiary is not defendant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Verdict returned for cigarette manufacturers | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Compensatory damages awarded | ' | ' | ' | ' | $25,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $8,000,000 | ' | ' | $3,520,000 | $35,000,000 | $35,000,000 | $50,000,000 | ' | ' | ' | ' | ' | $7,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Damages paid to deceased smoker's son | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 21,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Punitive damages awarded | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 81,000,000 | 81,000,000 | ' | 4,000,000 | 25,000,000 | ' | ' | ' | ' | 145,000,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Attorneys' fees and costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lorillard Tobacco's share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 79,000,000 | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 60,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of interest on Damages Awarded | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12.00% | 12.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Damages paid to plaintiffs in individual cases by manufacturers | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Punitive damages paid to smokers | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Actual damages paid | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reinstated the compensatory damages awards by Florida Supreme Court | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cases filed by family members | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of claims severed into separate lawsuits | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,400 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cases scheduled for trial | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50 | 107 | 120 | 200 | 150 | 150 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' |
Number of cases dismissed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,309 | ' | 45 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional Number of cases dismissed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 520 | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of cases dismissed for a variety of reasons | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 440 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of appeal filed by plaintiffs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 70 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Compensatory damages awarded to plaintiff | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 21,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 225,000 | 6,000,000 | ' | 4,500,000 | 692,981 | 150,000 | ' | 1,000,000 | 1,000,000 | ' | 20,000,000 | ' | ' | ' | ' | ' | ' | ' | 3,230,000 | ' | ' | 2,055,050 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of fault of company for injuries | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 44.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | 65.00% | ' | 5.00% | 10.00% | 3.00% | ' | ' | 20.00% | ' | 80.00% | ' | ' | 18.00% | ' | ' | ' | ' | 9.00% | ' | ' | ' | ' | 20.00% | ' | ' | ' | ' | ' | ' | 3.00% | ' | ' | ' | 33.00% | ' | 33.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Jury apportion of fault for smoker's injuries to smokers | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 95.00% | 35.00% | ' | 45.00% | 70.00% | 91.00% | ' | ' | 60.00% | ' | 20.00% | ' | 20.50% | ' | ' | ' | ' | ' | 31.00% | ' | ' | 40.00% | ' | ' | ' | ' | ' | ' | 85.00% | ' | ' | ' | 34.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Punitive damages awarded to plaintiff in final judgment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Compensatory damages awarded to plaintiff in final judgment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 43,081 | ' | 50,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 256,500 | 11,250 | 3,900,588 | ' | 225,000 | 109,298 | ' | ' | ' | ' | ' | ' | 16,100,000 | ' | ' | ' | ' | ' | ' | ' | 2,035,500 | ' | ' | 1,233,030 | ' | 411,010 | ' | ' | 225,000 | 1,500,000 | 45,000 | ' | ' | ' | 3,828,000 | ' | 1,914,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Annual interest rate on damages awarded in final judgment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.00% | ' | 6.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Compensatory damages awarded in punitive | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Provisionally granted plaintiff's motion for attorney fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of fault of other defendants for injuries | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Litigation cost and fees to company | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 246,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Damages awarded to plaintiffs for loss of companionship | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Jury apportion of fault for smoker's injuries to other defendants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% | 3.00% | ' | ' | 20.00% | ' | ' | ' | ' | ' | 27.00% | 25.00% | 9.50% | ' | 60.00% | ' | ' | ' | ' | ' | ' | 30.00% | 10.00% | ' | ' | ' | ' | 12.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Final judgment of annual interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.75% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.00% | ' | ' | 4.75% | ' | 4.75% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.75% | ' | ' | ' | ' | 4.75% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reduction in compensatory damages | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loss contingency compensatory damages awarded value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,000,000 | 16,000,000 | ' | 20,500,000 | ' | ' | ' | ' | ' | ' | ' | 280,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Final contingency punitive damages awarded value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | 54,850,000 | 12,600,000 | ' | ' | ' | 42,250,000 | ' | ' | 12,362,042 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Verdict returned against other cigarette manufacturers | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Actual and punitive damages were paid in Engle Progeny Cases | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 31 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Punitive damages award in cases against other cigarette manufacturers | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 709,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum punitive damages award in one of the twelve cases against other cigarette manufacturers | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum punitive damages award in one of the cases against other cigarette manufacturers | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 244,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum security deposit for Engle Progeny cases | ' | ' | ' | ' | ' | ' | ' | 200,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cases dismissed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 645 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lorillard Tobacco has been dismissed from cases in lack of evidence against them | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 565 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cases consolidated for trial | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,250 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of plaintiffs asserting both claims | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 28 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of plaintiffs involved in severed IPIC claims | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lorillard Tobacco as a defendant in Severed IPIC Claims | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of plaintiffs involved in Severed IPIC claims using only other tobacco products in which neither Lorillard Inc nor Lorillard Tobacco are Defendants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cigarette Manufacturers companies and Trade associations as defendants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' |
Additional cases to be filed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' |
Verdicts returned | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8 | ' | ' | ' | ' | ' | ' | ' | ' |
Cases are concluded | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6 | ' | ' | ' | ' | ' | ' | ' | ' |
Defendant Prevailed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7 | ' | ' | ' | ' | ' | ' | ' | ' |
Court granted plaintiff's motion for a new trial | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' |
Damages awarded to plaintiff for French v. Philip Morris Incorporated | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,500,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Damages reduced by trial court for French v. Philip Morris Incorporated | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' | ' |
The cost of compliance to Lorillard Tobacco | ' | ' | ' | 20,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount claimed to recover profits earned by defendants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 280,000,000,000 | ' | ' | ' | ' | ' |
Pretax charges for obligations under state settlement agreements | ' | ' | ' | ' | 120,000,000 | 118,000,000 | 120,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,379,000,000 | 1,241,000,000 | ' | ' | ' | ' |
Annual payment by domestic tobacco industry | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,400,000,000 | ' | ' | ' | ' | ' |
Cap on plaintiffs attorneys fees paid by domestic tobacco industry | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000,000 | ' | ' | ' | ' | ' |
Additional amount paid for plaintiffs attorneys fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 125,000,000 | ' | ' | ' | ' | ' |
Number of states involved in master settlement agreement | ' | ' | ' | ' | 17 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of expected credit to be received over the next five years | ' | ' | ' | ' | 220,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of expected credit to be received over the next four years | ' | 164,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of expected credit to be received | ' | ' | 12,000,000 | 165,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase under state settlements liability and expenses | ' | ' | 1,000,000 | 21,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of states failed to diligently enforce escrow | 6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of states that did not participate in the settlement | 9 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Compensatory damages expected to be paid | 458,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 47,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Trust fund payable to compensate tobacco growing communities | ' | ' | ' | ' | 5,200,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of states having tobacco growing communities to be compensated by "Trust" | ' | ' | ' | ' | 14 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of years compensated by law to tobacco quota holders and tobacco growers | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Compensation to tobacco quota holders and tobacco growers | ' | ' | ' | ' | 10,100,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated cash payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | 75,000,000 | 80,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment made in settlement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 31,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Compensatory damages and damages for loss of consortium | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Indirect purchaser suits | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30 | ' |
Number of states involved in Tobacco-Related Antitrust Indirect Purchasers Suits | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20 | ' |
Indirect purchaser suits dismissed by courts | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' |
Loews as co-defendant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' |
Number_of_Cases_Pending_Detail
Number of Cases Pending (Detail) | Feb. 14, 2014 | Dec. 31, 2013 | Feb. 14, 2014 | Feb. 14, 2014 | Feb. 14, 2014 | Feb. 11, 2013 | Feb. 14, 2014 | Feb. 14, 2014 | Feb. 14, 2014 | Feb. 14, 2014 |
Conventional Product Liability Cases | Engle Progeny Cases | Engle Progeny Cases | West Virginia Individual Personal Injury Cases | Flight Attendant Cases | Class Action Cases | Class Action Cases | Reimbursement Cases | Filter Cases | Tobacco-Related Antitrust Cases | |
Subsequent Event | LegalMatter | Subsequent Event | Subsequent Event | Subsequent Event | LegalMatter | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | |
LegalMatter | LegalMatter | LegalMatter | LegalMatter | LegalMatter | LegalMatter | LegalMatter | LegalMatter | |||
Loss Contingencies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loss contingency pending claims number | 23 | 3 | 4,197 | 38 | 2,572 | 1 | 1 | 1 | 62 | 1 |
Valuation_and_Qualifying_Accou
Valuation and Qualifying Accounts of Lorillard, Inc. and Subsidiaries (Detail) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | ' | ' | ' | |||
Balance at Beginning of Period | $3 | $2 | $3 | |||
Charged to Costs and Expenses | 203 | 199 | 193 | |||
Charged to Other Accounts | ' | ' | ' | |||
Deductions | 203 | [1] | 198 | [1] | 194 | [1] |
Balance at End of Period | 3 | 3 | 2 | |||
Allowance for Discounts | ' | ' | ' | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | ' | ' | ' | |||
Balance at Beginning of Period | 1 | 1 | 1 | |||
Charged to Costs and Expenses | 203 | 198 | 193 | |||
Charged to Other Accounts | ' | ' | ' | |||
Deductions | 203 | [1] | 198 | [1] | 193 | [1] |
Balance at End of Period | 1 | 1 | 1 | |||
Allowance for Doubtful Accounts | ' | ' | ' | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | ' | ' | ' | |||
Balance at Beginning of Period | 2 | 1 | 2 | |||
Charged to Costs and Expenses | ' | 1 | ' | |||
Charged to Other Accounts | ' | ' | ' | |||
Deductions | ' | ' | 1 | [1] | ||
Balance at End of Period | $2 | $2 | $1 | |||
[1] | Discounts allowed. |